eBay tops estimates, sets 3-for-1 stock split

E-commerce firm eBay topped Wall Street estimates Tuesday with fourth quarter operating earnings of $2.8m (£1.7m), or 7 cents a share, on sales of $19.5m. The company also announced a 3-for-1 stock split effective March 1.
Written by Larry Dignan, Contributor

Wall Street was expecting earnings of 4 cents a share. Including charges, eBay reported earnings of $1.5m, or 4 cents a share. eBay recorded charges of $773,000 and $515,000 related to the amortisation of stock compensation and acquisition-related expenses, respectively. In the fourth quarter a year ago, eBay reported earnings of $214,000, a penny a share.

The company said it moved a lot of goods in the quarter. Gross merchandise sales (the value of goods traded) was $307m, up 57 percent from the $195m reported in the third quarter. Registered users jumped to 2.1 m as of Dec. 31, up from 1.2 m registered users in the third quarter. eBay also hosted over 13.6 m auctions during the fourth quarter, up from 9.2 m in the third quarter.

Although sales soared, costs also increased. Gross profit margin decreased to 85 percent for the quarter from 87 percent a year ago. The company said expenses increased because of customer support, transaction expenses such as ISP connectivity charges and bank processing charges, and a national advertising campaign.

For the year, eBay reported revenue of $47.4m, compared to $5.7m in 1997. Including charges, eBay had earnings of $2.4m, 6 cents a share. Excluding charges, eBay earned share on a fully diluted basis. $7.9m, or 21 cents a share. In 1997, eBay earned $899,000, or 3 cents a share.

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