eBay's Profit and Revenue Soar

Updated from 6:17 p.m. EST

eBay on Thursday reported surging fourth-quarter profits and sales.

The online auction company posted net income of $87 million, or 28 cents per diluted share, on $413.9 million in revenue. That's up from the $25.9 million, or 9 cents a share, eBay earned last year on $219.4 million in revenue.

Excluding items, the company earned $87.6 million, or 28 cents a share, on a pro forma basis. Wall Street analysts surveyed by Thomson Financial/First Call expected the company to earn 24 cents per share on $386.6 million in revenue in the quarter.

The company's performance in the quarter well exceeded its guidance and most expectations, noted Safa Rashtchy of U.S. Bancorp Piper Jaffray.

"Either they were extremely conservative or they really had a breakout quarter," Rashtchy said. "Everything worked well together as a reverse of Murphy's law." U.S. Bancorp Piper Jaffray does not have any investment banking business with eBay.

eBay results were assisted by a strong contribution from its recently acquired PayPal business. For the quarter, PayPal posted revenue of $74.7 million, up 87% from the year-ago quarter.

Total accounts at PayPal jumped 82% in the quarter compared with the year-ago period to 23.3 million and the total number of payments grew by 76% to 39.2 million. Meanwhile, the total transaction volume at the online payments company increased 77% compared with the year-ago period to $2.1 billion.

But PayPal was not the only standout portion of eBay's business. eBay's international operations -- the company operates sites in the United Kingdom, Germany, France, among other countries -- also performed well.

Revenue from eBay's international auction sites, excluding online payments, came in at $109.1 million, up from $40.1 million in the year-ago period. International sales, including online payments, now comprise 30% of eBay's revenue, up from 18% in the year-ago quarter.

Although its growth was slower than the other two segments, eBay's U.S. auction business also did well. Revenue at the U.S. business, excluding online payments, came in at $225.1 million, up 30% from the $173.6 million the segment reported in the year ago period. Fueling that was a surge in transaction revenue, which rose 58% from $134 million in the fourth quarter of 2001 to $211.4 million in the just completed quarter. eBay charges customers to list items on its sites and takes a commission on items that are actually sold through it.