, the online auction site, Tuesday reported earnings and revenue that beat Wall Street's expectations. The company also announced a 2-for-1 stock split.
For the first quarter ended March 31, earnings rose 66% to $8 million, or 6 cents a diluted share, excluding charges, from $4.8 million, or 4 cents a share, a year earlier. Analysts polled by
First Call/Thomson Financial
had estimated earnings of 3 cents per share.
Revenue in the quarter doubled to $85.8 million, also exceeding estimates, fueled by a 127% increase in online auction sales. In a conference call with investors, eBay said annual revenue should come in about $20 million higher than the $390 million it had estimated previously.
"It was a very strong quarter," said Anthony Noto, an analyst with
. (He rates eBay shares a buy and his firm has done banking for the company.) Noto had expected no operating income in the seasonally slow first quarter, but eBay reported $452,000 in operating income. Interest income rose to a whopping $10.4 million.
CEO Meg Whitman said the company is working to diversify beyond its traditional online consumer auction business with a used-car marketplace (a joint venture with Autotrader.com), business-to-business markets and the company's
payment system. Those businesses should begin to make meaningful revenue contributions later this year, said Whitman.
"The real story is with the leverage they'll get" as they introduce their 12.6 million registered users to new services, said Sara Farley, analyst with
. (She rates eBay shares a buy and her firm hasn't performed recent underwriting for the company.)
The Billpoint system allows credit card payments on eBay auctions, avoiding more cumbersome check-based transactions.
owns a 35% stake in Billpoint. Whitman said an eventual IPO of the unit is "a possibility," since the business is so distinct from eBay's other units, but that nothing is in the cards for the near term.
The company said a 2-for-one split will be effective May 24.
Shares of eBay rose 8 to 162 in after-hours trading.