News: eBay Investors Turn Picky
October 20th, 2005 by Laurie BarakSource: internetnews.com
eBay posted better than expected third-quarter results late Wednesday, but investors sent the company’s stock lower after hours on earnings guidance that was slightly below forecasts.
eBay also announced that CFO Rajiv Dutta will become president of recently acquired Skype after his successor is named. Dutta will work with Skype CEO Niklas Zennstrom and eBay CEO Meg Whitman on the VoIP unit’s growth and integration across eBay and PayPal, and will remain a member of eBay’s executive management team.
The online auction king’s sales grew 37% to $1.106 billion in the quarter, beating analysts’ $1.08 billion forecast. Pro forma earnings of 20 cents a share met estimates.
“We saw very strong growth across every part of our business in Q3,” Whitman said in a statement. “It’s wonderful to see so much strength in our two largest marketplaces, the U.S. and Germany. We’re excited about the great momentum eBay and PayPal have going into the holiday shopping season.”
Indeed, it was hard to find a metric that didn’t grow by 30% or more in the quarter. U.S. marketplace net revenues grew 29%, international net revenues grew by 43% and payment net revenues grew 44%. Users, listings and volume all grew by more than 30% from the year-ago quarter.
eBay projected fourth-quarter sales of $1.25 to $1.28 billion, above $1.24 billion estimates, but said earnings for the quarter will likely come in at 21 cents, a penny below forecasts, doe to a 1-cent dilution from Skype. That lone negative might have accounted for the 6% drop in eBay shares in after-hours trading.
Analysts have been skeptical of the Skype acquisition, particularly given the huge premium that eBay paid for the company, but Whitman offered a forceful defense of the acquisition on the company’s conference call, calling the combination an “unprecedented opportunity” for global expansion.
