EBay Inc, the world's No. 1 Internet auctioneer, said second-quarter earnings more than doubled to US$109.7 million. Profit and forecasts weren't as high as some investors expected, dragging the company's shares down as much as 6.2 percent.
Net income surged to US$0.33 a share, from US$54.3 million, or US$0.19 a share, a year earlier. Revenue jumped 91 percent to US$509.3 million from US$266.3 million, the San Jose, California-based company said. EBay will split its stock 2-for-1 on Aug. 28.
EBay exceeded analysts forecasts for profit by US$0.02 a share, or lower than what some investors may have expected after the company exceeded analysts' first-quarter estimates by US$0.05 a share and had a tripling of profit in the fourth quarter.
EBay's shares have more than doubled since September.
"It was a good quarter, but the stock's had a run anticipating a better-than-good quarter," said Paul Cook, director of technology investing at Munder Capital Management, which manages more than US$30 billion of assets, including EBay shares.
Third-quarter profit excluding certain costs will be US$0.34 a share on revenue of US$515 million, EBay said. That's less than Thomson Financial's survey, which predicted a US$0.35 profit and US$518.2 million in revenue.
Net income this quarter will be US$0.29 a share, or US$0.01 less than it previously projected, because of EBay's recent acquisition of EachNet Inc to accelerate growth in China.
EBay's market value of US$36.7 billion is almost three times that of as much as Sears, Roebuck & Co, the largest US department store chain.
Excluding stock-based pay costs, amortization and certain other expenses, EBay said second-quarter profit would have been US$0.37 a share. On that basis, which doesn't conform to generally accepted accounting principles, the company was expected to earn 35 cents, according to Thomson Financial.
"People may be a bit surprised the upside this quarter was not as strong and that guidance is not raise more," said Derek Brown, a Pacific Growth Equities analyst who has an "equal-weight" rating on the shares and does not personally own the stock.
"Which, when all is said and done, are all minor negatives on a very strong second quarter," he said.
The company, which gets most of its revenue from fees and commissions charged sellers, said the value of goods sold through its sites rose 66 percent to US$5.6 billion.
The number of EBay users climbed to 34.1 million in the past year as chief executive officer Meg Whitman sought to attract new users and encourage repeat business through television commercials with a "Do It EBay" tag line.
Revenue from transactions in the US rose 45 percent to US$242.4 million as people used EBay to auction items ranging from PEZ candy dispensers to 707 aircraft converted into homes. The increase was down from the 49 increase in the first quarter.
International transaction revenue soared to US$155.1 million, a 146 percent rise from a year earlier. That increase was lower than the 166 percent gain in the first three months of the year.
"This business just continues its `up and to the right' trajectory," said chief financial officer Rajiv Dutta in an interview. He said EBay has raised its revenue forecast for this year by US$245 million since first issuing projections last year.
PayPal transaction revenue jumped 90 percent to US$99.4 million from US$52.5 million last year. EBay bought the service that allows people to transmit payments via e-mail for US$1.5 billion in October.
EBay boosted its full-year earnings forecast to as much as US$1.31 a share and said sales may rise to as much as US$2.08 billion, US$25 million more than earlier estimates.
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