EBay Upgrades Financial Outlook
By BRIAN BERGSTEIN
AP Business Writer
Friday July 19, 10:13 am Eastern Time
Internet Auction Leader eBay Affirms Optimistic Long-Term Forecasts
SAN JOSE, Calif. (AP) -- Despite the barrage of bad news emerging from the technology sector, Internet auction leader eBay Inc. slightly upgraded its financial outlook as it detailed second-quarter earnings that more than doubled from last year.
EBay's report Thursday elaborated on the core profit and revenue numbers the company released July 8, when it announced plans to acquire online payment provider PayPal Inc. in a stock deal now worth $1.4 billion.
EBay's profit in the quarter, which ended June 30, was $54.3 million, or 19 cents per share, on revenue of $266.3 million. In the comparable period last year, eBay earned $24.6 million, 9 cents a share, on revenue of $180.9 million.
"Based on this strong financial performance, we are more confident than ever in our outlook for the balance of 2002 and beyond," said Rajiv Dutta, eBay's chief financial officer.
Investors weren't dazzled, however. EBay shares fell $1.17, nearly 2 percent, to close Thursday at $60.45 on the Nasdaq Stock Market before the earnings report. In after-hours trading, the stock sank to $58.70.
In response to an analyst's question, chief executive Meg Whitman said eBay would be willing to treat stock options as a business expense as long as a fair and standard method of valuing the options could be applied.
That put Whitman at odds with many other Silicon Valley CEOs, who have said expensing stock options would be an accounting disaster. So far the high-tech industry has resisted increasing pressure to initiate the accounting practice in the interest of making financial reports more straightforward.
By almost any measure, eBay's business is humming. Registered users increased to 49.7 million, up 46 percent from this time last year. The total value of goods sold on the site rose 51 percent to $3.4 billion in the second quarter.
Looking ahead, Dutta predicted earnings per share of 19 cents in the current quarter -- exactly what Wall Street analysts were estimating, according to Thomson Financial/First Call. Dutta predicted full-year earnings of 76 to 78 cents per share, which is line with analysts' estimate of 77 cents but higher than eBay's previous forecasts.
He also said 2003 revenue could range from $1.50 billion to $1.55 billion; analysts were expecting $1.54 billion.
Neither estimate includes the potential addition of PayPal, which is expected to have $225 million in revenue this year. Either way, San Jose-based eBay has a good chance of achieving Whitman's goal of $3 billion in revenue in 2005.
"I am very excited about eBay's future, because the company has a lot more room to grow," Whitman said.
Analyst Shawn Milne of Soundview Technology Group pointed out that eBay's earnings would have been even higher if Internet advertising had been strong. That shows that eBay's core business -- taking fees from sellers on the site -- "is progressing well," he said.
In the first half of 2002, eBay earned $101.9 million, 36 cents per share, on revenue of $511.4 million. In the first half of last year, the company had net income of $45.7 million, 16 cents per share, on revenue of $335.0 million. |
