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Technology Stocks : John, Mike & Tom's Wild World of Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (881)	4/26/2000 7:00:00 PM
From: John Pitera	Read Replies (2) \| Respond to of 2850

EBAY numbers-- I'm pretty agnostic on EBAY........ I definitely. see your point. ------------------- eBay (EBAY-$154-O) Strong C1Q00 Results Mary Meeker/Mark Mahaney EBAY reported strong C1Q00 results. Revenue reached $86MM, up 100% Y/Y and 16% Q/Q, ahead of our estimate of $79MM. Adjusted operating income came in at $2.7MM, ahead of our $800K estimate, and operating net income came in at $8MM. Operating EPS of $0.06 came in ahead of our $0.04 estimate and the First Call mean of $0.03. Online revenue reached $78MM (up 128% Y/Y and 27% Q/Q), ahead of our estimate of $71MM. Note that an accounting policy change -- recognizing listing and feature fee revenue over the length of the auction (usually one week) as opposed to at the beginning of the auction -- knocked $1.4MM off the C1Q revenue total. That $1.4MM will be recognized in C2Q00. Without the accounting change, online revenue would have been 11% above our estimate and up 30% Q/Q. C1Q marked the biggest online revenue upside to our estimates since C1Q99. Offline revenue declined Q/Q from $13MM in C4Q99 to $8MM in C1Q00 due to seasonal factors, as expected. EBAY's growth in non-financial metrics was solid: registered users increased a record 2.6MM Q/Q to 12.6MM; gross merchandise sales increased 28% Q/Q to $1.1B (a $4.6B run rate); and quarterly auctions increased 31% Q/Q to 54MM. As usual, EBAY retained its lead as the Web's most trafficked site based on both page-views per person and usage-minutes per person (the minutes comparison excludes AOL and Juno, both of which are in part access services) and was in Mar the 15th largest property based on reach among US Web users, according to Media Metrix. We increase C2000 and C2001 revenue estimates, but maintain operating income estimates for the balance of C2000 and for C2001. Specifically, we raise C2000E revenue from $385MM to $407MM (up 81% Y/Y) and C2001E revenue from $540MM to $560MM (up 38% Y/Y). We are looking for C2000E operating income of $61MM (15% margin) and C2001E operating income of $96MM (17% margin). Note that an increase in interest income assumptions tweaks up our EPS estimates by $0.01 per quarter for the remainder of C2000 and by $0.02 for C2001. We expect EBAY to reinvest revenue upside into the business in the form of higher marketing spend and more product development, and we would encourage this. We introduce new C2002E revenue of $728MM and EPS of $0.81. We maintain our Outperform rating.