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ebay beats 2Q
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July 19, 2001: 5:35 p.m. ET
Online auction site, credits jump in revenue, raises second half forecast
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NEW YORK (CNNfn) - Internet auction site ebay Inc. posted sharply higher second quarter earnings Thursday, beating Wall Street forecasts in spite of a slowing economy in which consumers have streamlined their spending.
For the quarter ended June 30, ebay reported second-quarter earnings of $33.5 million, or 12 cents a share, beating Wall Street expectations by 3 cents a share and compared with $10 million or 5 cents a share a year earlier. Analysts on average anticipated 9 cents a share, according to First Call.
The company also said it anticipates second half revenue $15 million to $30 million higher than its previous estimates, with earnings between 21 cents and 22 cents a share, and said it forecast a strong holiday season.
Including a $33.5 million charge, the company reported net income of $24.6 million, or 9 cents a share.
Ebay's (EBAY: Research, Estimates) revenue increased 84 percent to $180.9 million from $98.2 million. The company's shares ended down $2.14 at $64.40 ahead of the earnings announcement.
"What we have seen is that our army of entrepreneurs, our users, bring to market what consumers want, and they are far more adaptive and prescient that any company can be," ebay CEO Meg Whitman told Lou Dobbs Moneyline Thursday.
Ebay's profitability contrasts with the rest of online retailing, which has been devastated in the last year with the economic slowdown and stock market declines, particularly the tech-laden Nasdaq.
Analysts attribute ebay's success to its business model, which helps keep costs in line by shifting responsibility for transactions mostly to sellers and buyers.
The company has also found success in moving beyond its core business, expanding overseas, offering a "buy it now" feature and companion sites like half.com. "Buy it now" and half.com allow customers to buy second-hand goods directly instead of bid on them.
"I think you are seeing the benefits of building out beyond the core model as they've gone into more into practical goods, autos being an extreme example of that," said David Ricci, analyst at William Blair & Co.
Ricci said features such as "buy it now" accelerate sales and helps clear out inventory.
In April, ebay said it remained comfortable with Wall Street's consensus forecasts for the second quarter, but some on Wall Street were concerned that the traditionally slow summer months would break the company's momentum.
During the quarter ebay added more than 4.4 million registered users, bringing the total number to 34.1 million. The company hosted 98.7 million auctions, reflecting a 58 percent increase from a year earlier.
Online net revenue grew 92 percent during the quarter to $170 million compared with a year earlier.
The company completed the acquisition of iBasar S.A. during the quarter, a leading online European trading site. Ebay's international business reported net revenue that increased 12 percent from the previous quarter.
Ebay expanded half.com during the quarter to include electronics, sporting goods and trading cards. Sales from this site and the "buy it now" feature represented 11 percent of total sales.
Online advertising revenue increased 10 percent from the previous quarter. 
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eBay
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