Internet auction site posts 3Q profit in line with estimates; stock hit in after-hours trade.
October 16, 2003: 5:57 PM EDT
NEW YORK (CNN/Money) - Internet auction company eBay posted a third-quarter profit on Thursday that met Wall Street's estimates.
San Jose, Calif.-based eBay (EBAY: Research, Estimates) reported net income of $103.3 million, or 16 cents a share, compared with net income of $61 million, or 11 cents a share, a year earlier.
Excluding amortization of goodwill, stock-based compensation expenses and acquisition-related costs, eBay earned $118.3 million, or 18 cents a share, in line with analysts' forecasts, according to First Call.
Sales for the quarter rose to $530.3 million from $288.7 million for the same period last year. The consensus estimate was for sales of $519 million.
eBay's stock fell over 6 percent to $53.80 in after-hours trading, according to Instinet. The stock shed 10 cents to $57.50 during regular trading on Nasdaq. eBay did a two-for-one stock split in July.
"I think people expected more of an upside on the bottom line, and that didn't happen. Although we didn't expect a big upside in the third quarter, we do think the fourth quarter will look much better," said Shawn Milne, analyst with SoundView Technology.
The company said it now expects 2003 revenue to be as high as $2.1 billion, which is $25 million higher than its earlier guidance, citing strength from its U.S., international and payment businesses.
eBay expects a fourth-quarter profit of 21 cents a share -- in line with analysts' estimates, and a full-year profit of 72 cents a share, a penny higher than its most recent guidance. The full-year guidance is below analysts' current consensus estimate of a profit of 75 cents a share, according to First Call.
For 2004, eBay said it expects revenue to be as high as $2.9 billion, compared with analysts' revenue forecast of $2.8 billion for the year. However, it also guided for a profit of 98 cents a share for 2004, also below Wall Street's forecast of profit of $1.05.
"eBay's forward guidance is somewhat disappointing," said Derek Brown, analyst with Pacific Growth Equities.
Net revenue for eBay's online payment services company, PayPal, were $108.4 million, an 83 percent increase from $59.3 million last year.
Rajiv Dutta, eBay's chief financial officer, said during its earnings call that although it anticipates a strong holiday quarter, it does anticipate foreign currency fluctuations to remain a risk going forward.
Regarding eBay's Motors unit -- the company's auto-sales unit -- Meg Whitman, eBay's president and CEO said during the call that the company was implementing changes in the next quarter to make it "easier" to use.
Smith Barney analyst Lanny Baker recently downgraded eBay to "sell" from "hold," citing concerns over eBay Motors' pricing model and auction format.
Registered users, another key metric for the company, showed strong growth. eBay had 85.5 million registered users at the end of the quarter, up 56 percent from a year ago and up 10.2 million users sequentially.
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