EBay's reported solid first quarter results and upped its earnings outlook for 2008.
The auction giant reported first quarter net income of $460 million, or 34 cents a share, on revenue of $2.19 billion, up 24 percent from a year ago. Excluding charges, eBay had earnings of 42 cents a share, which topped Wall Street estimates by three cents.
As for the outlook, which is what most folks were waiting for, eBay (statement, preview) said it expects second quarter earnings of 39 cents a share to 41 cents a share excluding charges. Wall Street was expecting 40 cents a share. Based on generally accepted accounting principles, eBay said earnings will be 30 cents a share to 32 cents a share on revenue between $2.1 billion and $2.15 billion. The revenue target was slightly ahead of estimates.
For 2008, eBay raised its earnings target projecting earnings excluding charges of $1.70 to $1.75 a share compared to estimates of $1.68 a share. Overall, eBay had a decent first quarter debut for new CEO John Donahoe.
By the numbers:
- First quarter operating margin was 25.2 percent, down from 26.5 percent a year ago. The company said the decline was due to faster growth at lower margin businesses such as Skype and PayPal.
- eBay's marketplaces business unit--eBay, Shopping.com, StubHub, Kijiji--had revenue of $1.48 billion, up 19 percent. However, those results were helped by currency gains as 55 percent of marketplace revenue comes from abroad. Gross merchandise volume was $16.04 billion, up 12 percent.
- PayPal had $582 million in net revenue, up 32 percent from a year ago. Global active accounts increased 17 percent to 60.2 million.
- Skype had revenue of $126 million in the first quarter, up 61 percent. Skype has 309 million registered users globally.
- The company ended the quarter with $4.11 billion in cash.