EBay Surpasses Profit Forecasts, Raises Outlook for Year

Online auction leader eBay reported quarterly results that beat Wall Street expectations and said its outlook for the rest of the year would be at the high end of analysts' predictions.

Shares of eBay jumped as much as 6% after the company posted a 52% jump in net profit on a 27% revenue rise, led by growth in its core auctions business and the rising prominence of international sales.

Paul Sakuma / AP Ebay's offices in San Jose, California. The company said Wednesday that first-quarter profit surged 52%.

"I would say it was a very strong quarter across the board," Chief Executive Meg Whitman said in an interview. "We are actually accelerating our organic growth rate, excluding the impact of foreign exchange and acquisitions."

"I think we feel very good about the remainder of the year," Whitman said. "We raised guidance, both top- and bottom-line."

For the year, it predicted revenue in a range of $7.2 billion to $7.45 billion -- right in the middle of Wall Street forecasts, according to Reuters Estimates. That beat eBay's previous 2007 revenue forecast of $7.05 billion to $7.3 billion.

EBay forecast full-year earnings per share of $1.30 to $1.34 -- at the top end of analysts' predictions, which ranged from $1.27 to $1.34, based on Reuters Estimates data.

"Overall it was a good report card," said Martin Pyykkonen, an analyst with Global Crown Capital. "The full year (revenue forecast) is up $150 million," he said. "That's a nice bump considering they still have three quarters to go in the year."

"These are positive numbers versus expectations, which should be good for the stock," Stifel Nicolaus analyst Scott Devitt said.

Net income for the recently ended first quarter rose to $377 million, or 27 cents per diluted share, compared with $248.3 million, or 17 cents per diluted share, a year earlier.

Excluding stock-based compensation and acquisition costs, profit rose 34% to $460 million, or 33 cents per share.

Revenue rose to $1.77 billion from $1.39 billion. The split between U.S. and international revenue is now 50/50, a shift since a year ago when the United States accounted for 54% of revenue and 46% was generated overseas.

The results outstripped Wall Street forecasts. Analysts had predicted an average net profit of 24 cents per share, according to Reuters Estimates. Excluding one-time items and option costs, analysts expected a profit of 30 cents a share.

Wall Street was looking for first-quarter revenue, on average, of $1.72 billion. Forecasts ranged from $1.69 billion to $1.77 billion, Reuters Estimates data showed.

Net revenue from its marketplaces business grew 23% to $1.25 billion. Registered users rose 21% to 233 million around the globe.

Net revenue at online payments service PayPal grew 31% to $439 million, while the number of registered users of the credit card alternative rose 36% to 143 million.

Merchant services, the PayPal unit that supplies online payment services to Web sites beyond eBay's own properties, reported payment volumes grew 51% to $4.38 billion.

Competition from rival merchant payment system Google Checkout appears to be continuing to help drive PayPal's own growth, Whitman said. "Amazingly enough, we had 51 percent growth. The interest in this category is helping (PayPal)."

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