eBay tops 4Q

January 18, 2001: 7:13 p.m. ET

Online auction site beats earnings estimates on soaring revenue

NEW YORK (CNNfn) - Popular online auction site eBay Inc. Thursday said more users combined with its expansion into new markets helped it surpass Wall Street's fourth-quarter earnings estimates by 2 cents a share.

The San Jose, Calif.-based company reported fourth quarter net income of $23.9 million, or 9 cents a share, compared with net income of $5.1 million, or 2 cents a share a year earlier.

Analysts had expected eBay to earn 7 cents a share, according to earnings tracker First Call.

Sales for the quarter increased 81 percent to $134 million from $73.9 million a year earlier, reflecting increased revenue in its core auction business, growth in international operations and increased partnership and advertising revenue, the company said.

Shares of eBay (EBAY: Research, Estimates) soared in after hours trading Thursday to more than $51. That's after finishing the regular session up $3.62, or 8.4 percent, at $46.88 ahead of the earnings report released after the bell.

"We are extremely pleased with the strength of our business and with the tremendous momentum we have going into the new year," CEO Meg Whitman said.

For the year, eBay reported net income of $58.6 million, or 21 cents a share, compared with net income of $18.3 million, or 7 cents a share in the year-earlier period.

For the full year 2000, the company posted net revenue of $431.4 million, 92 percent higher than the $224.7 million it reported a year ago.

In spite of an economic downturn that saw a slowdown in consumer spending, eBay added 3.5 million registered users in the fourth-quarter, more than doubling its total number of registered users for the year to 22.5 million from 10 million a year ago.

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EBay entered several new markets during the quarter, including Korea, through its acquisition of Internet Auction Co. Ltd., that country's largest auction-style Web site on Jan. 7. The company also began signing up users in Canada, France, Austria and Italy, officials said during a conference call with analysts Thursday.

The company also cited strong growth at half.com, the online merchant site that deals in second-hand merchandise, which eBay acquired earlier in the year.

Going forward, eBay said it expects the acquisition of Internet Auction and momentum from the fourth-quarter to send 2001 revenue as high as $665 million with first quarter revenue approaching $150 million.

Users transacted $1.6 billion in gross merchandise sales, which is the value of goods traded on the eBay Web site in the quarter, a 79 percent increase compared to the same period a year ago.

In addition, eBay hosted 79.4 million auctions in the quarter compared with 41 million a year earlier. Officials said their profit margins increased substantially.

In separate developments, the company announced that Rajiv Dutta, its vice president of finance, was appointed chief financial officer. Former CFO Gary Bengier was promoted to senior vice president for strategic planning and development, a role in which he will oversee long-term planning across all business units.