What economic slowdown?
Even as consumer spending lags, Internet auction giant eBay said people continue to flock to the site, helping the company beat Wall Street expectations and boost its sales forecast for the next six months.
EBay said Thursday that revenues for the January-to-March period were $154.1 million, an almost 80 percent increase over the year-ago quarter. Net income excluding one-time charges was $30.6 million (11 cents per share), exceeding analysts' estimates by 3 cents. Including extraordinary charges, income was $21.1 million vs. $6.3 million last year.
"EBay's momentum continues to accelerate," said CEO and President Meg Whitman.
EBay's performance is particularly impressive given the general economic malaise affecting many retailers and other online businesses. Not only is eBay the only e-commerce site that is thriving, it appears to be booming in part because of the slowing economic environment.
"The bargain hunters are out and looking for a better deal" on eBay, said analyst Jeetil Patel of Deutsche Banc Alex. Brown.
If eBay's sunny revenue predictions prove correct, the San Jose, Calif., company will see sales that are as much as $10 million to $15 million higher than previously expected during the next two quarters. That translates into 2001 revenues of about $680 million, up from an average estimate of $665 million.
EBay said that for the quarter ended March 31, it continued to attract new users and listings – key metrics for the company. EBay added more than 7.2 million users during the quarter, bringing the total to almost 30 million. And eBay hosted 89 million auctions, a 66 percent increase over the year-ago quarter.
EBay, which last year laid out a bold goal of reaching $3 billion in sales by 2005, said that it will continue to expand the amount of business it does with fixed-priced selling. Last year, the company bought Half.com, an e-commerce site that sold books, music and movies for set prices. Just this week, Half.com began selling a broader range of categories, expanding into computers, electronics, sporting goods and trading cards.
A fixed-price feature introduced late last year called Buy It Now also has proven popular and is offered on 30 percent of items listed for sale. The Buy It Now features allows a seller to sell an item at a set price or enter the item into an auction. EBay hopes the Buy It Now feature would help it increase the speed that items are sold, thus attracting more sellers.
In anticipation of eBay's positive earnings news, shares rose almost 9.3 percent to $49.99 on Thursday.
