Online auctioneer eBay, one of the few profitable Internet companies, yesterday reported better-than-expected earnings for the third quarter--its first as a public company.
Excluding one-time charges related to stock compensation and acquisition expenses, the company earned $2 million, or 5 cents a share, compared with net income of $199,000, or 1 cent a share, for the same quarter a year ago before the company was publicly traded. With the charges, eBay earned $663,000, or 2 cents per share.
The company took charges of $818,000 related to the amortization of stock compensation and $515,000 for acquisition-related expenses.
Financial analysts had expected the company to post a profit of 3 cents a share for the quarter ended September 30, according to First Call.
During the quarter ending in September, revenue rose more than eight-fold to $12.9 million from $1.5 million for the same period last year.
"We are pleased to issue our first earnings release as a public company with such positive growth momentum," chief executive Meg Whitman said in a statement.
eBay, a pioneer in the person-to-person secondhand merchandise sales market, brings buyers and sellers together by merging classified ads with the bidding process of an auction. The company has more than 1.2 million registered users, and more than 800,000 items for sale in 1,000 different categories.
Executives said the company added 400,000 new users during the quarter and hosted 9.2 million auctions, up from 6.6 million during the prior quarter.
eBay stock closed up more than 12 percent yesterday at 82.5, ahead of the earnings report, setting a new 52-week high for the second day in a row. The stock soared up 46 percent yesterday to 73.375 after Donaldson Lufkin & Jenrette analyst Jamie Kiggen initiated coverage on the company with a "buy" rating with a 12-month price target at $100.
Analysts had expected the company to report some $10 million in revenue, but speculated that numbers might even beat those expectations, which gave eBay stock a boost this week.
Shares have traded as low as 25.25 since the company went public last month. The company said it netted $66 million from its initial public offering.
eBay said its sales and marketing expenses increased during the quarter, primarily from costs of the AOL deal. eBay, which recently launched a national advertising campaign, said certain marketing expenses related to that campaign will be deferred until the fourth quarter.
"We expect that the number of eBay users will continue to grow as consumers discover that eBay is the place to trade on the Internet and as we work to build our brand awareness through aggressive marketing initiatives," Whitman said. "In addition, we will continue to invest in capital and customer support infrastructure in order to provide our community of users the best possible experience on eBay.''