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To: 2MAR$ who wrote (359)	10/20/2000 7:32:55 AM
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Ebay Q3 earnings outbid Wall Street forecasts (UPDATE: Adds details, previous SAN JOSE) By Andrea Orr PALO ALTO, Calif., Oct 19 (Reuters) - The Internet auction site eBay Inc. (NasdaqNM:EBAY - news) on Thursday reported third quarter earnings that increased more than six-fold and sailed past Wall Street forecasts, prompting a strong rally in its stock. The results also produced a favourable response from Wall Street analysts, who said eBay had distinguished itself as the leading consumer Internet company, and perhaps the only one that is free of major operating concerns. ``They were quite exceptional,'' Dave Ricci, an analyst with William Blair and Co. in Chicago said of the results. ``There was nothing in the report that anyone needs to be concerned about.'' EBay said its earnings, excluding certain unusual charges, totalled $19.1 million or seven cents per diluted share, compared with $3 million or one cent per diluted share in last year's third quarter. Analysts who follow the company had on average been forecasting a profit of four cents per share, according to First Call/Thomson Financial, which tracks results. Shares of eBay, which had gained close to $4 to end the regular trading session at $57-3/16, shot up to around $66 a share in after-hours trade, following the release of earnings. Although eBay still trades at less than half its 52-week high, it has held up better than most other Internet stocks in recent months. EBay said its net income for the quarter was $15.2 million or five cents per diluted share, compared with $1.2 million, or nil cents per share in the year-ago quarter. Revenues rose to $113.4 million from $58.5 million in the same period last year, and eBay's base of registered users grew to 18.9 million from 7.7 million a year earlier. During an interview and a later conference call with analysts, eBay executives said the results reflected the continued push into new geographic regions and new product areas, as well as a shift toward higher-margin products such as cars. EBay, which was initially known as an online flea market for selling relatively low-ticket items like toys, now offers a popular service for selling cars and equipment for small businesses. It has also launched a new site focusing on real estate, where consumers can bid on houses or commercial property. And, a growing number of local governments, including the states of Massachusetts and Oregon, have started making their purchases on eBay. EBay said it hosted some 68.5 million auctions during the third quarter, compared with 36.2 million in the year-ago quarter. The total value of goods sold on the site reached $1.4 billion, growing 83 percent from the year before. ``We are extremely pleased with our momentum in the last quarter,'' eBay Chief Executive Meg Whitman told analysts. She said the company remains on a ``rapid expansion plan'' and is aiming to launch regional sites in more U.S. cities, attract more business and government customers and offer new products. ``We are ever mindful of the ever growing market opportunities,'' she said. Company officials also said the financial outlook remained strong, and projected gross margins, which were 79 percent in the latest quarter, should edge up to the low 80's by the end of next year. EBay, which has always been grouped in an elite group of Internet companies, has with its recent performance, pulled away from even the other top companies, said William Blair analyst Ricci. ``I always felt eBay was a much bigger concept than Amazon.com (NasdaqNM:AMZN - news) ,'' he said. Ricci added that eBay did not have an ad-based business model, which has posed concerns for several Internet media companies like Yahoo Inc (NasdaqNM:YHOO - news). ``What eBay offers is truly superior to anything that can be found offline,'' he said. ``They are using the Internet in a way that is truly revolutionary.'' Email this story - View