eBay Beats Estimates

Earnings Scorecard
Actual	Estimated*	Year-Ago
$0.09	$0.07	$0.02

eBay (EBAY), one of the few Internet companies that ekes out a profit, topped Wall Street's expectations Thursday when it released fourth-quarter results after the close of regular trading.

The online auction company, which is based in San Jose, Calif., said net income was $23.9 million, or 9 cents a share, on revenue of $134 million. This compares to last year's net income of $3.9 million, or 2 cents a share, on $73.9 million of revenue. Analysts polled by First Call/Thomson Financial expected the company to earn 7 cents a share -- the same amount it earned in the third quarter -- on revenue of $125.5 million.

In recent days, many analysts predicted eBay would top Wall Street expectations, and its shares have enjoyed a strong run. Since Jan. 5, the shares have risen nearly 50%, and closed Thursday up $3.63, or 8%, at $46.88. In after-hours trading on Island, the shares were recently at $50.81.

The earnings news was the second significant announcement to come from the company this week. On Tuesday eBay said it would raise the fees it charges to list items for auction, prompting a flurry of analyst upgrades and giving investors further confidence in the company's business model.

The company plans a 5 p.m. EST conference call with the investment community to discuss its results. On the call, analysts will be looking for any indication of how its so-called emerging businesses have performed. In particular, analysts expect guidance for how its fixed price site Half.com, which eBay bought in July, is performing.

"Although listings and traffic are quite good [at Half.com], no news on revenues will be perceived as bad news," says Stephen Fitzgibbons, an analyst at JP Morgan H&Q. (Fitzgibbons rates the stock a long-term buy, and his firm hasn't done recent underwriting for eBay.)

In addition, growth from its auto business, eBay Motors, is seen as key for the company to reach its stated goal of $3 billion in revenue by 2005, a prediction the company made in September.

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