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Quarterly Earnings Triple at EBay

Site attributes its success to national TV ads and the growing acceptance of electronic commerce for holiday buying.

January 17, 2003|David Colker | Times Staff Writer

Online auctioneer EBay Inc. said Thursday that its fourth-quarter net income more than tripled from last year, flying in the face of traditional retailers who had a disappointing holiday season.

The San Jose-based company earned $87 million, or 28 cents a share, for the quarter ended Dec. 31, up from $25.9 million, or 9 cents a share, a year ago. Its revenue, which comes almost entirely from user fees, was $413.9 million, nearly double the $219.4 million of a year earlier.

"There is no question it was a strong report," said analyst Jeff Fieler of Bear Stearns. Neither Fieler nor his firm does business with EBay or owns the stock. "The company has a lot of momentum."

The results beat a 24-cents-a-share prediction from analysts polled by IBES International.

Calling it "a very merry e-Christmas," Chief Executive Meg Whitman attributed EBay's success to the growing acceptance of electronic commerce for holiday buying, boosted by national television advertising.

The company in October bought PayPal -- a payment system used to facilitate credit card transactions online -- in a $1.25-billion deal. PayPal brought in $72.6 million in fees last quarter, boosted by being more widely displayed on EBay.

The company continued to accumulate cash, which rose to $1.1 billion at the end of December. But EBay executives said they will not be following Microsoft Corp.'s move Thursday to issue a dividend to investors.

"We are not philosophically opposed to returning money to our stockholders," said Chief Financial Officer Rajiv Dutta, "but our position is that there is a certain amount of cash that gives us strategic flexibility, and we have not reached that yet."

He declined to say what that amount would be.

EBay finished the year with 61.7 million registered users, up from 42.4 million at the end of 2001. PayPal has 23 million users.

EBay shares fell $2.25 to $71.25 in regular Nasdaq trading Thursday, but rose to $71.90 in after-hours trading after the earnings report.

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