eBay's profit spurt as U.S., Europe markets gain strength |
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Thu, 21 Jul 2005 17:35
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SAN FRANCISCO: Online auctioneer eBay Inc. posted a 53 per cent increase in its second quarter profits at $291.6 million, or 21 cents a share, compared with $190.4 million, or 14 cents a share, a year earlier, dismissing concerns that its marketplace growth is slowing. The company's stock price rose by 15 per cent Wednesday.
The company's key markets, the U.S. and Germany, continued to be strong. Revenue for the U.S. grew by 27 per cent to $423.6 million from a year ago while revenue outside the U.S. registered an increase of 51 per cent to $418.8 million. Total revenue showed a growth of 40 per cent to $1.09 billion from $773.4 million in the corresponding previous year period.
Revenue from online payment service PayPal rose to $243.9 million from $161.5 million a year ago with the number of registered users going up by 56 per cent to 78.9 million.
The company had a record 64.6 million active users -- who bid, bought or listed an item on the site -- during the quarter compared with 48 million a year earlier.
The value of goods sold on the sites grew to $10.9 billion from $8 billion, while the number of items listed for sale went up by 32 per cent to 440.1 million during the period under review.
Gross profit as a percentage of sales widened to 82 percent from 81 percent a year earlier.
In terms of half-year, profit rose to $547.9 million, or 40 cents a share, from $390.5 million, or 29 cents, while revenue went up by 38 per cent to $2.12 billion.
Buoyed by the performance, the San Jose, California-based company raised its third-quarter revenue forecast to be in the range of $1.05 billion - $1.07 billion from the earlier $1.04 billion - $1.06 billion. It said it now expects the total 2005 revenue to be in the range of $4.3 billion - $4.4 billion.
Company chief executive Meg Whitman said in a statement that excellent momentum in the U.S. and Germany, as well as at PayPal, "all helped deliver an impressive jump in revenues and profit". Favorable foreign currency exchange rates too contributed to the performance.
She said the company's performance in Asia, particularly China, too has been creditable and it intends to invest $100 million in China this year, expecting the market there to be the company's biggest.
At the current prices, the company has a market capitalization of $47.7 billion. It has been rated by Google recently as the Internet's most valuable company.
Whitman claimed the searches on eBay are on par with those on Google.
The company is acquiring Shopping.com Ltd for $620 million. It is also offering a new service allowing sellers to open their own online stores that can be run independent of the eBay marketplace.
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