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eBay Makes More eHay

Online auction giant eBay did it again, posting fourth quarter earnings of $25.9 million or nine cents per share fully diluted, below what the Street was looking for but still coming in with its 13th straight profitable quarter.

The figures compared to a net profit of $23.9 million, or nine cents per share, in the same period a year earlier.

Revenues came in at $219.4 million, up about 64 percent from the $134 million reported in the year-ago quarter. But the big question is, can they keep it up?

eBay has been one of the few shining stars in the Internet sector and fourth quarter profits were largely expected. The company said that it expects sales for the first half of 2002 to be between $490 million and $510 million. It also believes that pro forma earnings per share could range between 32 cents to 33 cents.

Both user activity and listings were up in the quarter, a spokesman was quoted as saying, despite the events of Sept. 11 that affected so many other online businesses. And eBay said its international business achieved operating profitability for the first time.

Analysts polled by First Call on average had been expecting eBay's fourth quarter earnings per share to come in at 13 cents, and 47 cents per share for all of 2001.

"It's yet another spectacular quarter for the company," Derek Brown, an analyst at W.R. Hambrecht, told CBS MarketWatch.com.

eBay stock closed Tuesday at $64.03, up 87 cents, but was declining in after-hours trading, apparently because investors didn't like the fact that the company's guidance did not extend beyond the second quarter of 2002.

For the full year, eBay said it generated consolidated net revenues of $748.8 million, representing 74 percent annual growth. Consolidated net income for the year was $90.4 million, or 32 cents per diluted share.

"We have excellent momentum going into 2002 and feel confident with our long-term strategy, ongoing execution and the inherent strength of our business model," said Meg Whitman, president and CEO of eBay.

The company's metrics continued to look good. eBay said users transacted a record $2.74 billion in gross merchandise sales during the fourth quarter, a 69 percent year-over-year increase. eBay hosted a record 126.5 million listings during the quarter, representing 59 percent year-over-year growth. And it added a record 4.8 million users, to end the fourth quarter with 42.4 million confirmed registered users, up 88 percent from a year earlier.

eBay's fixed price initiatives, Buy It Now, Half.com and eBay Stores, contributed more than 19 percent of total gross merchandise sales in the fourth quarter, up sequentially from 16 percent in the third quarter of 2001.