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eBay 4Q beats expectations
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January 25, 2000: 7:38 p.m. ET
Online auction house cites surge in registered users of its Web site
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NEW YORK (CNNfn) - Online auction house eBay Inc. reported better-than-expected fourth-quarter profits Tuesday, reflecting a surge in registered users.
Shares of the San Jose, Calif.-based company rose 8-1/2 to 146 in after-hours trading after closing up 1-1/8 to 137-1/2. The company saw a 52-week high of 234.
eBay posted net income of $4.9 million or 4 cents per diluted share. Profits, excluding one-time items, rose to $6.1 million, or 4 cents per diluted share, compared with $3.9 million, or 3 cents per diluted share, in the year-ago period.
Analysts surveyed by earnings tracker First Call Corp. expected eBay to earn 2 cents per share. Revenues reached $73.9 million, a 139 percent increase over the $30.9 million reported for the year-ago quarter.
Registered eBay users increased 10 million by the end of the fourth quarter, a 359 percent increase from 2.2 million users at the end of 1998.
For the year, eBay (EBAY) earned $10.8 million, or 8 cents per diluted share, on revenues of $224.7 million, a 162 percent increase over 1998 revenues of $86.1 million. Before the effect of one-time items, the company earned $19.4 million, or 14 cents per diluted share, compared with $12.8 million, or 11 cents per diluted share, in 1998.
"1999 was a terrific year of strong, profitable growth," said Meg Whitman, president and CEO of eBay.
eBay said it hosted 41 million auctions during the fourth quarter, compared to 13.6 million during the year ago period.
Bullish outlook
During a conference call Tuesday evening, Whitman said the company expected revenues for 2000 to be $30 million to $40 million above consensus estimates of $350 million to $360 million.
"I think overall the outlook for next year was particularly bullish," said Alan Mak, an analyst with Argus Research in New York.
Mak also said the company's plans to expand its Billpoint person-to-person credit card Internet payment system "could potentially be a very large revenue stream for them."
Mak said currently the majority of transactions on eBay are paid by check or money order, which is less efficient than credit card payments. Billpoint will give eBay a method to convert more of their users into actual paying customers.
In addition, Billpoint will help eBay in its international expansion, removing currency exchange issues.
"At 75 cents per transaction plus 4.5 percent off the top, they're almost like loan sharks," Mak said. "They could also leverage Billpoint into other auction sites."
Whitman said the company plans to roll out Billpoint throughout the site in the second quarter and then roll it out much more broadly in the second half of 2000.
Mak said another good sign was eBay's move into bigger ticket auctions, such as cars and furniture.
"Any way you slice it, hosting an auction for a car pays many more times than a Beanie Baby auction," he said. 
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