EBay’s Cautious Forecast Eclipses 36% Profit Gain

Online auctioneer EBay Inc. reported a 36% jump in fourth-quarter profit Wednesday as listings in the U.S. and Germany lifted revenue, but shares slipped after the company issued a cautious forecast.

EBay’s net income climbed to $279.2 million, or 20 cents a share, from $205.4 million, or 15 cents, during the same quarter in 2004. Revenue, spurred in part by discounts to attract listings during the holiday shopping season, rose 42% to $1.33 billion.

Excluding certain noncash expenses, the company earned 24 cents a share, beating the average profit estimate of 22 analysts surveyed by Thomson Financial by 2 cents.

Nonetheless, EBay reiterated its revenue forecast for 2006 of $5.7 billion to $5.9 billion, which one Wall Street analyst described as conservative after a decent fourth quarter. Shares dropped to $43.30 in after-hours trading, after falling 97 cents to $44.44 in regular trading

“EBay is getting more complicated these days because there’s more businesses being rolled in,” said Scott Devitt, an analyst with Stifel Nicolaus & Co.

EBay acquisitions include PayPal, Shopping.com and Internet telephone service provider Skype Technologies Inc.

EBay executives said they wanted to see how new businesses played out before updating their forecast. “We don’t have sufficient experiences with those at this point,” Chief Financial Officer Rajiv Dutta said.

EBay also announced plans to tweak its fee structure by lowering some fees while raising one other beginning Feb. 22.

“Last year it very much felt like there were issues and problems on the EBay site, the company wasn’t listening and they were profitable and they increased the fees for sellers,” said Ina Steiner, editor of AuctionBytes.com and author of “Turn eBay Data Into Dollars.” “This year they ... seem to be listening to sellers and actually giving them something as they are raising the fees.”