EBay’s Profit, Revenue Soar
Online auctioneer EBay Inc. saw first-quarter revenue and profit rise faster than bids for rare Lladro figurines.
Buoyed by the continued climb in the number of new Internet shoppers and triple-digit growth of its international business, the San Jose-based auction house’s revenue was up 94% from a year earlier, to $476.5 million, the company said Tuesday.
The bulk of EBay’s revenue comes from the fees it collects for facilitating online garage sales of everything from collectible lunch boxes to new cars.
Profit more than doubled to $104.2 million, or 32 cents a share, from $47.6 million, or 17 cents. The results matched the expectations of Wall Street analysts surveyed by Thomson First Call.
“They continue to hit on all cylinders,” said Shawn Milne, analyst for SoundView Technology Group in San Francisco, which doesn’t own stock in EBay and rates the shares “outperform.”
“The company hasn’t really seen any negative impact from the economy or the war,” Milne said.
EBay Chief Financial Officer Rajiv Dutta estimated that the war with Iraq cost the company $3 million in sales, based on a drop in visitors to its Web site in the initial days of the fighting.
“We were all watching CNN and not trading on the site,” Dutta said in an interview.
And a sour economy may have benefited EBay, which is viewed as a source of good deals. “If there’s one trend we’re seeing, it’s that consumers are looking for selection and value,” Dutta said. “They’re looking for bargains.”
Dutta declined to comment on speculation about the company’s long-term growth.
Some analysts have said that EBay can’t continue its pace of growth over the long haul. Dutta said only that EBay projects $3 billion in annual revenue by 2005.
The number of people who registered to use EBay in the first quarter jumped 69% from the year-earlier period to 68.8 million; the number of listings on the site rose 59% to 220 million. EBay facilitated $5.3 billion in sales in the quarter, up 71% from last year.
While U.S. revenue grew a strong 29% in the quarter, international sales soared 164%, driven by EBay’s popularity in Britain, Germany and Australia.
EBay Chief Executive Meg Whitman predicted in a conference call that foreign sales someday would exceed U.S. sales, but declined to specify when.
The company’s PayPal payments business, which it purchased last fall for $1.25 billion in stock, kicked in $94.2 million in revenue in the quarter, up 93% over the previous year.
EBay executives predicted full-year revenue of $2.05 billion, up $105 million from their earlier guidance. Earnings also would rise to $1.27 a share from $1.12, they said.
Shares of EBay waned 1.7% to $89.22 in regular Nasdaq trading on concerns about the company’s ability to maintain current growth. In after-hours trading, they climbed as high as $92.40 after the company released its results.
