eBay's fourth quarter wasn't so bad, but the first quarter outlook was disappointing. And the company on its conference call declined to give guidance for 2009.
Here's the scorecard (statement):
- eBay's fourth quarter earnings were $367 million, or 29 cents a share. Excluding items, earnings were 41 cents a share, two cents ahead of Wall Street estimates.
- Fourth quarter sales of $2.04 billion was light relative to expectations of $2.12 billion. eBay cited a strong dollar and a weak economy.
- Margins continued to fall in the fourth quarter. eBay said operating margins were 22.3 percent for the fourth quarter, down from 28.7 percent a year ago.
- The first quarter outlook fell short of projections. eBay sees first quarter revenue of $1.8 billion to $2.05 billion with earnings excluding charges of 32 cents a share to 34 cents a share (21 to 23 cents a share under GAAP). The problem: Wall Street was expecting earnings of 40 cents a share excluding charges on revenue of $2.1 billion.
For 2008, eBay reported earnings of $1.78 billion on revenue of $8.54 billion. Despite all the abuse eBay takes as a business, it's an operation that throws off a lot of cash. In 2008, eBay had free cash flow of $2.3 billion. You could do much worse than $2.3 billion in cash flow.
A few interesting nuggets (click to enlarge slides):
- eBay's marketplace unit--eBay primarily and other e-commerce sites like StubHub--saw sales fall 16 percent in the fourth quarter to $1.27 billion.
- The payments unit--PayPal and Bill Me Later had revenue of $623 million in the fourth quarter, up 11 percent from a year ago.
- Skype had revenue of $145 million, up 26 percent from a year ago but roughly flat with the third quarter tally of $143 million. Skype added 35 million new users to end up with 405 million total.
- Bill Me Later has tightened its credit standards.