EBay reports profit up 22%
Benefiting from a weak dollar, online auction company EBay Inc. beat Wall Street’s expectations Wednesday, reporting a 22% hike in first-quarter profit and raising its outlook for the rest of the year.
EBay reported net income of $460 million, or 34 cents a share, on revenue of $2.19 billion in the quarter that ended March 31. A year earlier, EBay earned $377 million, or 27 cents a share, on revenue of $1.77 billion.
Excluding one-time items, EBay’s net income was $562 million, or 42 cents a share, compared with $460 million, or 33 cents, in the first quarter of last year. On that basis, analysts polled by Thomson Financial expected, on average, earnings of 39 cents a share on revenue of $2.08 billion.
More than half of EBay’s business -- including its core online auction, fixed-price and store listings, PayPal, Skype and classifieds -- takes place overseas. Transactions in stronger foreign currencies mean more dollars for EBay.
EBay raised its outlook for 2008, saying it now expected revenue of $8.7 billion to $9 billion with earnings per share of $1.35 to $1.40. Excluding special items, it forecast earnings per share of $1.70 to $1.75.
The company said it repurchased 37 million shares of its stock at a cost of $1 billion in the first quarter.
“This was a very strong financial quarter for the company,” Chief Executive John Donahoe said. “The results reflect the strength provided by our diverse portfolio of businesses.”
Donahoe said the company’s stability and growth give it the confidence to change its products.
During the quarter, the company made several modifications aimed at boosting listings, improving buyers’ experiences and making the site safer from fraud. The company changed its fee structure and feedback system, a move that some worried could damp listings growth.
The number of listings on the site grew 10% over the year-earlier quarter, continuing growth seen in the fourth quarter, which came after two quarters of declining listings last year.
Growth in active users, however, remained flat at 1% from a year earlier, and the growth rate has steadily declined, down from 10%. The growth rate for the total value of goods for sale on EBay is also down at 12%, versus 14% a year earlier.
The San Jose-based company raised its outlook for the current quarter, for revenue of $2.1 billion to $2.15 billion, with earnings per share of 30 to 32 cents.
Shares of EBay gained 54 cents, or 1.7%, to close at $32.12. The stock edged up to $32.15 in extended trading after the earnings news.