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Last Updated: Thursday, 21 April, 2005, 10:37 GMT 11:37 UK
EBay sees higher auction profits
EBay head office, AP
EBay is finding it hard to keep growing at the same rate
Internet auction site eBay saw profits rise 28%, beating expectations, but forecasts for the future were more cautious amid fears of slowing growth.

Profits for the three months to the end of March rose to $256.3m (134m), compared with $200.1m a year earlier.

Sales rose 36% to $1.03bn from $756.2m a year ago on strong overseas sales as eBay launched new auction sites.

It said the success of its PayPal online payment service also helped to take sales over the $1bn mark.

Overseas growth

The fundamentals weakened but did not fall off a cliff
Mark Mahaney, American Technology Research analyst

In its first quarter, more than half - or 52% - of eBay's revenues came from overseas.

The company said it will continue to rely on overseas markets, especially China, to keep growing.

It added more new users in China than in any other country and plans to introduce its PayPal payment service there.

It is also hoping to lure new customers in mature markets, such as the US and Germany, who haven't tried buying or selling on eBay yet.

Meg Whitman, eBay's president and chief executive, said: "We're in an excellent position to deliver on both topline and profit goals we've set out for 2005."

The firm has raised its 2005 sales forecast, predicting that annual revenue would come in between $4.27bn and $4.36bn.

Mature slowdown?

Cars in car park
Fraud affects 1% of transactions, mainly costly tems like cars

However, expanding in mature markets is difficult and fears of slowing growth have dogged the company since the end of last year when its fourth-quarter results showed revenue was not growing as fast as previously in the US and Germany.

That news prompted a one-day fall of 19% in its share price.

But analysts were not giving up on the auction site, which sells everything from cars to invitations to weddings.

"The fundamentals weakened but did not fall off a cliff," Mark Mahaney, an analyst at American Technology Research, told Reuters.

Another analyst, David Garritt of Caris & Co, warned that fraud was a concern.

Ebay said less than 1% of transactions tend to be fraudulent, though higher-priced items, like cars or PCs, are most likely to be affected.

Nearly 100,000 complaints about internet auction fraud, not all concerning eBay, were reported to the US' Federal Trade Commission.

Separately, the company is considering forming partnerships with mobile phone companies and companies offering phone calls over the internet.

EBay shares rose 4 cents to $31.11 in after-hours trading on the New York-based Nasdaq index after the results were released late on Wednesday.




SEE ALSO:
Dozens hit by e-mail auction scam
28 Mar 05 |  Scotland
eBay: Money for Old Rope?
25 Feb 05 |  Business


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