EBay Earnings Jump 64% on Rise in User Activity

Internet auctioneer EBay Inc. reported a 64% jump in fourth-quarter earnings Wednesday as more people bought and listed items for sale on its websites during the holidays. The company also raised its forecasts for sales and profit for the full year.

Net income at the San Jose company rose to $142.5 million, or 21 cents a share, from $87 million, or 14 cents, a year earlier. Revenue climbed a better-than-expected 57% to $648.4 million from $413.9 million, EBay said.

The Web auction company promoted itself as a holiday gift-buying site in commercials that humorously ballyhooed the varied items available for bidding. In addition, Chief Executive Meg Whitman pushed a program that provided lists of sought-after gifts to sellers while touting EBay’s PayPal e-mail payment business. That contributed to a 54% increase in registered users and 49% more listings.

“Everything was fairly strong,” said Paul Cook, director of technology investing for Munder Capital Management, which includes shares of EBay in the $35 billion of assets it manages.

EBay raised its 2004 net income forecast by 8 cents to as much as 99 cents a share and said it now projects revenue will be as much as $3 billion, or $100 million more that its previous forecast. The revenue forecast, if met, would allow EBay to reach a sales goal set by Whitman in September 2000 a year earlier than planned.

Shares of EBay fell $1.32 to $64.38 in regular Nasdaq trading. It rose to $67.03 in after-hours trading after the earnings report. EBay boosted its first-quarter revenue forecast to as much as $700 million and said profit may rise to as much as 24 cents a share. Sales increases in the fourth quarter gave the company more confidence in raising the 2004 forecast, Chief Financial Officer Rajiv Dutta said.