eBay profit jumps 44%

Strong holiday sales caused eBay’s profit to surge 44% from the same period last year, and optimistic executives raised their outlook for the rest of 2005. But the online auction giant failed to meet Wall Street’s expectations by a penny per share and its shares fell.

Ebay, one of the world’s largest e-commerce companies, announced fourth-quarter earnings on Wednesday of $205,4-million, or 30 cents per share, compared with $142,5-million, or 21 cents per share in the same period of 2003.

Excluding special items, eBay earned $226-million, or 33 cents per share, up from $157-million, or 24 cents per share, in the fourth quarter of 2003.

For the three months ended on December 31, eBay reported fourth-quarter revenue of $935,8-million, up 44% from $648,4-million in the year-ago period.

Analysts expected the San Jose-based company to earn 34 cents per share on sales of $934,17-million.

EBay shares dropped $3,32, or 3,1%, to close at $103,05 on Wednesday on the Nasdaq Stock Market before the earnings were released. In after-hours trading on Wednesday, the shares lost $10,07, or 9,8%, to $92,98.

Throughout 2004, eBay earned $778,2-million, or $1,14 per share, on sales of $3,27-billion.
In 2003, the company earned $441,8-million, or 67 cents per share, on sales of $2,17-billion.

EBay—considered one of the most financially conservative companies in Silicon Valley—boosted its outlook for the rest of the year based in part on hopes for new acquisitions, including a Dutch auction company and Rent.com. EBay purchased the privately held Santa Monica, California-based real estate firm last month for

about $415-million in stock and cash.

EBay expects 2005 sales as high as $4,35-billion, including $1,03-billion in the current quarter. It expects to earn up to $1,41 per share, including as much as 33 cents in the first quarter.

Meg Whitman, eBay president and chief executive, called 2004 an “outstanding success” that generated “tremendous momentum” for 2005.

“I’m more confident than ever that the decisions and investments we’re making today will ensure a bright future for the company and our community of users around the world,” she said.

EBay also announced Wednesday a two-for-one stock split effective Feb. 16 for shareholders of record on January 31. - Sapa-AP

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