EBay tops earnings and revenue expectations in Q2

EBay exceeded Wall Street's revenue and earnings expectations in its 2005 second quarter, ended June 30, helped by strong performance in the U.S. and Germany and in its PayPal unit, the San Jose, California, online marketplace said Wednesday.

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EBay reported net revenue of $1.086 billion, up 40 percent from last year's second quarter and above consensus expectation of $1.042 billion from analysts polled by Thomson First Call.

Net income rose 53 percent to $291.6 million, or $0.21 per share. On a pro forma basis, it was up 55 percent to $307.2 million, or $0.22 per share, topping consensus expectations of $0.18 per share.

Pro forma net income excludes certain items, including stock based compensation expenses and related payroll taxes, as well as amortization of acquired intangible assets and related income taxes, according to eBay.

Net revenue broke down as follows: $423.6 million came from eBay marketplace activity in the U.S., up 27 percent, while $418.8 million came from eBay marketplace activity abroad, up 51 percent, and $243.9 million was generated by the online payment unit PayPal, up 51 percent.

EBay ended the quarter with 157.3 million confirmed registered users, up 38 percent, and with 64.6 million active users, which are defined as users on the eBay platform who bid, bought, or listed an item within the previous 12-month period, up 34 percent.

Meanwhile, new listings were 440.1 million, up 32 percent. Gross merchandise volume, the total value of all successfully closed listings on eBay's trading platforms, was $10.9 billion, a 36 percent increase.

The PayPal online payment unit closed the quarter with 78.9 million total accounts, a 56 percent increase, while total payment volume, the dollar volume of payments initiated through the PayPal system, was $6.5 billion, a 49 percent increase.

Looking ahead, eBay expects net revenue for the entire year to be in the range of $4.340 billion to $4.410 billion. In the third quarter, eBay expects net revenue to be between $1.045 billion to $1.070 billion. The company expects to finish the year with earnings per share or either $0.77 or $0.78, up from previous guidance of between $0.71 to $0.73. In the third quarter, eBay now expects earnings per share of $0.18.

In terms of pro forma earnings per share, the company expects them to be either $0.82 or $0.83 for the full year, up from a previous estimate of between $0.76 and $0.78, and to be $0.19 in the third quarter.