Ebay quarterly net up 40 per cent

SAN FRANCISCO - EBay, the world's largest online auction site, on Wednesday posted a 40 per cent rise in quarterly net profit fueled by solid growth in US and German auctions and expansion of its payment business.

The results, excluding one-time items, were within the range of Wall Street expectations. In addition, eBay raised its revenue outlook for the rest of 2005 and next year as well.

"This was a particularly strong quarter for eBay across all parts of its business," eBay Chief Financial Officer Rajiv Dutta said.

Net income for the company rose to US$255.0 million ($361.65 million), or 18 cents per diluted share, compared with the year-earlier quarter's US$182.3 million, or 13 cents per diluted share. Revenue rose 37 per cent to US$1.11 billion.

Excluding one-time items, eBay posted earnings of US$280.2 million, or 20 cents a share.

Both the latest quarter's net and pro forma profit include a further charge of US$16.6 million, or 1 cent per share, to cover taxes for a new rule on intercompany stock option expenses. Without this charge, profit would amount to 21 cents a share.

On that basis, Wall Street had predicted a profit, on average, of 20 cents per share, according to Reuters Estimates data. Forecasts ranged between 19 cents and 21 cents a share.

Wall Street was looking for third-quarter net revenue, on average, of US$1.08 billion, according to Reuters Estimates data. Forecasts ranged between US$1.06 billion and US$1.12 billion.

Looking ahead, eBay forecast fourth-quarter net revenue in a range from US$1.25 billion to US$1.29 billion, which includes US$55 million of revenue from recent acquisitions Shopping.com and Skype. It introduced a 2006 projection of US$5.7 billion to US$5.9 billion, including US$200 million of revenue from Skype.

The San Jose, California-based company, whose auction business was created only a decade ago, carries a valuation of 38.6 times 2006 consensus earnings forecasts, in line with the stock multiples of other leading internet names such as Google and Yahoo.

"As we head into the close of the year, I couldn't be more pleased with the overall health of the business," said Dutta, who is stepping down as CFO to become president of Skype, which eBay acquired last week for around US$4 billion. "I think we are really well positioned for many years of growth," he said.

- REUTERS