EBay’s Net Income Increases 10%
EBay Inc. reported Wednesday that third-quarter profit increased 10% from the same period last year, beating Wall Street’s moderate expectations and encouraging executives to raise earnings forecasts for the full year.
The San Jose-based online auction company earned $280.9 million, or 20 cents a share, compared with $254.97 million, or 18 cents, a year earlier. Revenue increased 31% to $1.45 billion, at the high end of what Wall Street analysts had expected.
Excluding charges unrelated to continuing operations, EBay earned $367.41 million, or 26 cents a share, up nearly 24% from the same quarter last year. On that basis, EBay was expected to earn $342.4 million, or 24 cents, on sales of $1.43 billion, according to analysts polled by Thomson Financial.
For the fourth quarter, traditionally EBay’s strongest period, the company expects a profit of 27 cents to 28 cents a share excluding one-time costs. The company forecasts revenue of $1.62 billion to $1.68 billion.
For all of 2006, the company expects to earn $1.01 to $1.02 a share on revenue of $5.87 billion to $5.93 billion.
That’s slightly more bullish than EBay executives were at the end of the second quarter. In July, the company said it would probably earn 98 cents to $1.01 a share in 2006 on revenue of $5.7 billion to $5.9 billion.
EBay’s lucrative PayPal division -- a standard platform for online payments, on or off the auction site -- had $350 million in quarterly revenue, up 41% from a year ago. PayPal had 123 million users at the end of the quarter.
Internet-telephony subsidiary Skype, which EBay agreed to purchase in September 2005 for at least $2.6 billion, had revenue of $50 million in the third quarter, 13% more than in the previous three-month period. Skype had 136 million registered users at the end of the quarter. EBay did not provide Skype data for the year-earlier period.
EBay shares closed Wednesday at $28.49, down 29 cents, or 1%, before the earnings report was released. The shares rose 61 cents in after-hours trading.
