Strong Sales but eBay Share Price Drops 5%
Published April 20th, 2006
eBay has posted first quarter profit that met expectations, but the auction giant’s shares fell nearly 5 percent in after-hours trading after its guidance disappointed Wall Street.
Excluding special items, eBay posted 24 percent higher earnings of $342.9 million, or $0.24 per share, vs. $275.5 million, or $0.20 per share in the year-ago quarter. Wall Street had expected earnings of $0.23 per share on average, according to Thomson Financial’s survey of 20 analysts.
First-quarter sales rose to $1.39 billion from $1.03 billion from the same quarter a year ago.
Including special items and one-time charges, eBay reported net income of $248 million, or $0.17 per share, compared with $256 million, or $0.19 per share, in the year-ago quarter.
But eBay said in its statement it sees full year revenue in the $5.7 billion to $5.9 billion range, which is less than Wall Street had hoped.
Its shares fell $1.93, or nearly 5 percent, to $38.42 in after-hours trading.
Meg Whitman, the San Jose, California company’s president and CEO, said that “eBay, PayPal and Skype are successful businesses on their own, and together they create additional opportunities for innovation and expansion.†But it is not yet clear how Skype, the Internet phone company that eBay bought in October 2005 for $2.6 billion, will be integrated into the auction site and the online payment system.
eBay reported Wednesday that Skype had 94.6 million registered users. PayPal had 105 million accounts at the end of the first quarter this year up 47 percent from 71.6 million reported in the first-quarter of 2005.
The number of registered users on eBay’s core auction site rose 31 percent to 192 million from 147 million a year ago.
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