Why You Can Trust CNET eBay, Amazon.com surge on earnings
Shares of Internet auctioneer eBay and Amazon.com, the No. 1 online bookseller, surge after exceeding fourth-quarter earnings and sales expectations.
eBay, whose profit before charges rose 13-fold, shot up more than 37 percent, rising 82.6250 to 303.50. Amazon.com rose 10.5312 to 125.6250 after saying its loss widened less than expected.
The companies, viewed as bellwethers of electronic commerce by many investors and analysts, are expected to benefit the most from surging online sales. The companies are aggressively advertising their Web sites to attract first-time online shoppers, and have been expanding their services to keep buyers returning.
"Amazon is continuing in its role of e-commerce juggernaut," said Ryan Jacob, portfolio manager of the Internet Fund, which invests in Amazon.com.
San Jose, California-based eBay, one of the few Internet companies to make money, said its profit before charges rose to $2.8 million, or 7 cents a share. That compares with a profit of $214,000, or 1 cent, in the year-earlier quarter. Revenue rose more than eightfold to $19.5 million from $2.63 million.
eBay was expected to earn 4 cents, the average estimate of analysts polled by First Call. The company also said it will split its shares 3 for 1 effective March 1.
Seattle-based Amazon.com said its fourth-quarter loss before a charge was $22.2 million, or 14 cents a share on a pro forma basis. It had a year-earlier loss of $10.8 million, or 8 cents. Including a charge of $24.2 million for costs related to acquisitions, it had a loss of $46.4 million, or 30 cents.
Amazon.com was expected to lose 18 cents pro forma, according to the average estimate of analysts surveyed by First Call.
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