EBay Inc.'s 2002 profit excluding certain items may be as much as 3 cents below analysts' average estimate as the largest Internet auctioneer invests in its business. The company's shares fell sharply on the report.
Profit excluding stock-based pay and non-cash items will be 70 to 73 cents a share, EBay said. The firm is forecast to earn 73 cents next year, according to the average of analysts polled by Thomson Financial/First Call.
Revenue next year will be about $1.05 billion to $1.1 billion, EBay said. The company's 2002 revenue was forecast to rise 40% from this year's projected $737.5 million, according to First Call.
EBay's executives affirmed their aggressive long-term growth targets Monday and detailed plans to expand the sales of cars and other high-ticket items on the trading Web site.
At the company's annual meeting with financial analysts, Chief Executive Meg Whitman said she is even more confident than last year that revenue can reach $3 billion by 2005.
One reason is that the company's 24 international sites are not yet as profitable as EBay expects they will be in coming years.
"We are really proud of the foundation we have built," Whitman said. "It was in 2001 that EBay really hit its stride."
Shares of San Jose, Calif.-based EBay fell $4.48 to $52.52 on Nasdaq. The stock has gained 73% this year.
The profit excluding items isn't in accordance with generally accepted accounting principles.
EBay, founded in 1995, said at last year's annual analyst presentation that revenue would climb by 50% annually and reach $3 billion by 2005. At that time, the company said the size of the potential market for goods bought and sold on its sites would increase to $2 trillion in 2005. EBay doesn't sell merchandise in providing an online marketplace; rather, the company gains revenue from fees it charges for use of its site and other services.
EBay's other expansion efforts have included buying HomesDirect.com, the largest online auctioneer of foreclosed properties, and creating a way for sellers to open individual stores linked to its site.
Analysts said they were impressed that the company was able to stick to its long-term targets while still taking a conservative approach to its finances.
"It's a cash machine," said Jeetil Patel, Internet analyst for Deutsche Banc Alex. Brown. "Despite the economy, these guys are able to grow on a global basis."