Profits Soar For EBay ‘Nation’

“We delivered the results,” a triumphant Meg Whitman told analysts in eBay’s second-quarter earnings call.

Indeed. With a second-quarter net profit of $109.7 million, (33 cents per share), the San Jose, Calif.-based online auction marketplace beat estimates by 2 cents a share for the quarter. During the same, year-ago period, profits were $54.3 million, or 19 cents per share, more than 100 percent below the current quarter’s profits.

eBay reported record consolidated revenues of $509.3 million, up 91 percent year-over-year from revenues of $266.3 million for the same time last year.

Whitman told listeners that if eBay were a country, it would be the fifteenth largest nation in the world, as measured by its 75.3 million registered users — a 51 percent increase over the same quarter in 2002.

The results were another record quarter, according to Whitman and CFO Rajiv Dutta: record levels of registered users, of listings and in use of PayPal, the person-to-person payment system that eBay acquired, one year ago.

The company announced that total payment volume grew 76 percent in the second quarter, the total value of goods and services sold grew 66 percent, and, best of all, transaction revenues grew 111 percent. Gross merchandise sales were $5.6 billion. Operating income was 30 percent of net revenues and pro forma operating income was 33 percent of net revenues.

“Our confidence and our ability to manage the marketplace have never been stronger,” Whitman told analysts.

With eBay’s stock price strong and revenue expectations, eBay’s board approved a two-for-one split of all outstanding shares, payable August 28.

Whitman attributed her company’s continuing success to four factors: continued investment and refinement of technology, enhancements to site features and functions, work on trust and safety, and targeted marketing both externally and on the website. She said there were 580 million page views and 7.1 million bids on eBay’s highest-traffic day.

“EBay is a way of life for an every growing number of people,” Whitman said.

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