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Thursday, 19 April, 2001, 21:40 GMT 22:40 UK
eBay results cheer tech sector
eBay web site
If you are looking for strong results, eBay could deliver
The online auction site eBay has released profits that topped expectations by almost 40%.

In the first three months of the year, eBay generated profits of $21m, or 8 cents a share.

This was more than 10 times last year's profits of $1.8m - or one cent per share - during the same period.

eBay's momentum continues to accelerate

Meg Whitman
The company also reported revenues of $151.4m, ahead of analyst estimates of $149m and up 79% on last year.

"eBay's momentum continues to accelerate," said Meg Whitman, president and chief executive.

"Across all important metrics, we had a great quarter."

Shares of eBay jumped more than 9% to $49.99 on the Nasdaq Stock Market before the results were announced.

In after-hours trading, shares were up another $2.52.

Beating expectations

Excluding cash and non-cash charges, the company earned $30.6m, or 11 cents a share, compared to $4.4m, or two cents a share, last year.

This was also three cents above Wall Street's estimates.

These latest results support a pledge late last year by Ms Whitman that the company would make $3bn in sales by 2005.

To do this, the company needs to double its revenue each year. Last year, it generated $431.4m.

Future revenues

The company also raised its estimates for future revenues.

For the second quarter, eBay increased its forecast of $157-158m to $163-165m.

For the third quarter, estimated revenues were raised by $5-7.5m to $166-167m.

The popular online auction site is one of the few profitable companies, and has been from the start.

Its results show that it seems to be weathering the economic downturn quite successfully. Some analysts even believe that the company will capitalize as customers look round for bargains.

'A different animal'

So far the company has not had to issue a profits warning or lay off employees, unlike many other tech companies, such as Cisco Systems.

The worldwide leader in networking for the internet announced plans earlier this week to lay off 8,500 people. It also said sales for the third quarter would come in 30% lower.

"EBay is a different sort of animal, and it has no meaningful competition on a global basis," said W.R. Hambrecht analyst Derek Brown.

For the present its prospects look good.

The value of goods that traded on eBay last year was $5.4bn, almost twice the amount sold by the internet retailing giant Amazon.

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