Wednesday, October 17, 2007

eBay Share Price Up Big After Hours!

Update: eBay's stock closed at $40.60 up 5.18% over today's open and was up big in after hours trading but has given up all of those gains. Right now 3:03 PST the share price is at $40.32 in after hours trading

Here is the eBay press release on the 3rd Quarter numbers. And here is the PDF file on the 3rd Quarter numbers

eBay Inc. Announces Third Quarter 2007 Financial Results Wednesday October 17, 4:15 pm ET
SAN JOSE, Calif.--(BUSINESS WIRE)--eBay Inc. (Nasdaq:EBAY - News; http://www.ebay.com/) reported financial results for its third quarter ended September 30, 2007.

eBay reported record consolidated Q3-07 net revenues of $1.89 billion, representing a year-over-year growth rate of 30%. GAAP operating loss was $938 million in Q3-07, representing (50%) of net revenues, compared to GAAP operating income of $339 million in Q3-06. GAAP net loss in Q3-07 was $936 million, or $0.69 loss per diluted share. Both the GAAP operating loss and GAAP net loss were the result of the previously announced goodwill impairment charge related to eBay's acquisition of Skype.

Non-GAAP operating income was $593 million, representing a year-over-year increase of 28% and 31% of net revenues. Non-GAAP net income was $564 million, or $0.41 earnings per diluted share, representing a year-over-year increase of 53%.

The company purchased approximately 14.8 million shares of its common stock at a total cost of approximately $500 million during the quarter out of its authorized stock repurchase program of up to $2 billion by January 2009.

"During the quarter we made significant progress against our business unit strategies which resulted in record net revenues of $1.89 billion, a 30% year-over-year increase," said eBay President and CEO, Meg Whitman. "eBay International, PayPal Merchant Services, StubHub, classifieds and our advertising businesses all performed above our expectations."

Q3 Business Unit Discussion

Marketplaces
Overall, eBay's Marketplaces business had a strong quarter, with strong top-line growth and profitability. The company continues to make significant investments aimed at its core business as well as growing its newer businesses.

Marketplaces net revenues totaled a record $1.32 billion in Q3-07, representing a year-over-year growth rate of 26%. eBay's users posted a total of 556 million listings in Q3-07 representing a year-over-year decrease of 5%. These listings generated Gross Merchandise Volume (GMV) of $14.40 billion in Q3-07, representing a year-over-year increase of 14%.

Payments
PayPal posted another excellent quarter of Total Payment Volume (TPV) and revenue growth, primarily driven by its Merchant Services business, with acceleration in both.
PayPal net revenues totaled a record $470 million in Q3-07, representing a year-over-year growth rate of 35%. Global TPV was $12.22 billion in Q3-07, representing a year-over-year increase of 34%. PayPal Merchant Services contributed $5.38 billion globally to the $12.22 billion in global TPV in Q3-07, representing a year-over-year increase of 61%.

Communications
Skype delivered a third consecutive quarter of segment profitability, excluding the goodwill impairment charge of $1.39 billion. Geographically, all three major regions, Europe, North America and Asia exhibited robust revenue growth.
Skype net revenues totaled a record $98 million in Q3-07, representing a year-over-year growth rate of 96%. Skype had 246 million registered user accounts at the end of Q3-07, representing a year-over-year increase of 81%.

Other selected financial results
Operating Margin -- GAAP operating margin was (50%) in Q3-07, compared to 23% in Q3-06 due to the goodwill impairment charge of $1.39 billion. Non-GAAP operating margin decreased to 31.4% in Q3-07 from 32.1% in Q3-06. The decrease in non-GAAP operating margin is primarily the result of faster growth from our lower margin businesses, primarily PayPal and Skype, mostly offset by productivity gains.

Taxes -- The GAAP effective tax rate for Q3-07 was (4%), compared to 26% for Q3-06 and 23% in Q2-07. The non-GAAP effective tax rate in Q3-07 was 10%, which was a decrease from 27% for Q3-06 and 25% in Q2-07 primarily due to a tax benefit from a ruling issued by a tax authority related to prior periods resulting in a favorable impact of 8 percentage points and the remaining decrease was due to changes in the estimated geographic mix of the company's taxable income for the year.

Cash Flows -- GAAP operating cash flows increased to $629 million in Q3-07. Free cash flow increased to $510 million in Q3-07.

Cash, Cash Equivalents, and Investments -- The company's cash, cash equivalents, and investments totaled $4.44 billion at the end of Q3-07.

"Our third quarter results reflect strong revenue growth, even stronger non-GAAP earnings growth, and excellent free cash flow. With strong financial performance in each of the three quarters of the year, we approach the remainder of the year focused on the execution of our business plan and confident in our ability to deliver strong full-year revenue and earnings growth," said Bob Swan, Chief Financial Officer, eBay Inc.

Business Outlook
Fourth Quarter 2007 -- eBay expects consolidated net revenues for Q4-07 to be in the range of $2.100 billion to $2.150 billion. Non-GAAP earnings per diluted share for Q4-07 are expected to be in the range of $0.39 to $0.41. These amounts assume a US dollar to Euro exchange rate of $1.38.

Full Year 2007 -- eBay now expects consolidated net revenues for 2007 to be in the range of $7.600 billion to $7.650 billion. Non-GAAP operating margin for 2007 is expected to be approximately 33%. Non-GAAP earnings per diluted share for 2007 are now expected to be in the range of $1.47 to $1.49. These amounts assume a Q4-07 US dollar to Euro exchange rate of $1.35, and actual rates through the first three quarters of 2007.

Quarterly Conference Call
eBay will host a conference call to discuss third quarter results at 2 p.m. Pacific Time today. A live webcast of the conference call, together with a slide presentation that includes supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, can be accessed through the company's Investor Relations website at http://investor.ebay.com/. In addition, an archive of the webcast will be accessible through the same link.

I will post my 5 cents on these results after I hear the Conference call.

1 comment:

bonni said...

One of the great injustices of the world is that idiot-run corporations always manage to prosper. Ebay jerks people around, pulls stunts that seriously affect their customers in negative ways, waste billions on companies like Skype, and yet they go on to prosper.

There really is no justice in the world.