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eBay third quarter earnings are due out 18 October after the bell

Quote: ANALYST TAKE: Wall Street remains mixed on whether eBay's efforts to reinvigorate core growth are working.

Morgan Stanley analyst Mary Meeker wrote in an Oct. 4 note to investors that her analysis of auction listings data indicates store listings slowed and core listings accelerated during the quarter. Overall, Meeker estimated total listings grew 29 percent year-over-year, above her forecast of 28 percent...

But Citigroup analyst Mark Mahaney wrote in an Oct. 8 note to investors that while eBay's core listings in the U.S. seem to have stabilized, core listings in Germany and the U.K have not. The U.S. improvement may be due to special promotions for sellers during the quarter, not the new fees, he noted.

Mahaney wrote that he expects eBay to post results that match or fall short of estimates...

full article: http://www.businessweek.com/ap/financial...PU26G1.htm

Quote: Things to watch in Q3 earnings report:

    * Core listings growth - this has been one of major concerns of eBay investors. Management might have to answer some tough questions there including whether the recent experienced growth in core listings is due to the fee hike or to promotions.
    * Mix between auction and Store listings - is it improving and how is it affecting GMV?
    * What's happening in China, especially in light of eBay Eachnet CEO resigning last month and the rumors regarding a deal
    * How's eBay Express been performing?
    * International markets growth
    * The Google and Yahoo! partnerships - what kind of effects are expected or were already experienced
    * PayPal and competition - has Google Checkout gained market share? Does eBay feel an impact?
    * Skype - traction, going forward, increased contribution to revenue etc.
    * Did the listing fee hike cause a wider fleeing of merchants than expected? Any effects from that on revenue?

full article: http://ebay.bloggingstocks.com/2006/10/1...and-china/

You can bet no matter what is asked.. The SPIN will continue and the reports will still be skewed. :

On the Yahoo Finance boards, some gung-ho eBay stockholder was posting that the "whisper" was eBay earnings beat the estimate.  Then another posted noted that the "whisper" is correct roughly half the time, so who knows?

[quote author=rejoicemusic link=topic=5490.msg28077#msg28077 date=1161178393]
On the Yahoo Finance boards, some gung-ho eBay stockholder was posting that the "whisper" was eBay earnings beat the estimate.  Then another posted noted that the "whisper" is correct roughly half the time, so who knows?
[/quote]

You mean the Ghost Whisperer? Did you see the one where Ebay died and was trying to cross over into the light?

God met Ebay at the Pearly Gates and said, "Sorry, you've been too bad. You'll have to go to Wagglepop."

;D

Quote:Online marketplace eBay Inc.  on Wednesday posted a better-than-expected 10 percent rise in quarterly profit but issued a revenue outlook for 2007 that is sharply below Wall Street forecasts...

Looking into 2007, the company projected revenue growth of 17 percent to 21 percent, which is a marked deceleration from the 25 percent consensus growth rate among Wall Street analysts surveyed by Reuters Estimates. By contrast, analysts expect eBay revenues to grow 29 percent, on average, for all of 2006...

full article

full 3rd quarter earnings release:
http://files.shareholder.com/downloads/e...0FINAL.pdf

Quote:-eBay Inc.  reported financial results for its third quarter ended September 30, 2006.

eBay reported record consolidated Q3-06 net revenues of $1.449 billion, representing a growth rate of 31% year over year. GAAP operating income was $339 million, a decrease of 5% year over year, and represented 23% of net revenues. Excluding stock-based compensation of $74 million, operating income would have increased 16% year over year to $413 million, or 28% of net revenues. Non-GAAP operating income in Q3-06 was $464 million, representing a 32% operating margin and an 18% year-over-year increase.

GAAP net income in Q3-06 was $281 million, or $0.20 earnings per diluted share, an increase of 10% year over year. Excluding stock-based compensation of $51 million (net of tax effects), net income increased 30% year over year to $332 million, or $0.23 earnings per diluted share. Non-GAAP net income in Q3-06 was $367 million, or $0.26 earnings per diluted share, a 31% year-over-year increase.

The company repurchased approximately 24 million shares of its common stock at a total cost of $667 million during the quarter, completing one-third of its previously announced stock repurchase program.

"Q3 was a very good quarter for the company and a continuation of the strong earnings growth we delivered throughout the first half of the year," said Meg Whitman, President and CEO of eBay Inc. "As our results demonstrate, we are executing on our strategy to grow our Marketplaces, PayPal and Skype businesses individually and collectively to deliver greater value to our community of users and to our shareholders."

Q3 Business Unit Discussion

Marketplaces

Our Marketplaces businesses had a good quarter, in line with our expectations, characterized by solid growth in key geographic markets and a strong quarter from Shopping.com.

Marketplaces net revenues totaled a record $1.049 billion in Q3-06, a growth rate of 22% over the $858 million reported in Q3-05. The eBay platform confirmed registered user base at the end of Q3-06 totaled 212 million, representing a 26% increase over the 168 million users reported at the end of Q3-05.

eBay's users generated a total of 584 million new listings in Q3-06 (which included 95 million new Store Inventory Listings), 27% higher than the 459 million new listings reported in Q3-05 (which included 52 million new Store Inventory Listings). These listings helped drive eBay Gross Merchandise Volume (GMV), the total value of all successfully closed items on the eBay trading platforms, to $12.6 billion in Q3-06, representing a 17% year-over-year increase from the $10.8 billion reported in Q3-05.

Payments

PayPal had another excellent quarter, highlighted by increasing penetration on-eBay and excellent growth in our Merchant Services business.

PayPal net revenues totaled $350 million in Q3-06, a growth rate of 41% over the $247 million reported in Q3-05. PayPal had nearly 123 million total accounts at the end of Q3-06, a 41% increase from the 87 million reported in Q3-05. Those accounts helped drive record Total Payment Volume (TPV) of $9.1 billion in Q3-06, a 37% increase from the $6.7 billion reported in Q3-05.

PayPal Merchant Services posted a record $3.3 billion in global TPV in Q3-06, representing a 59% increase from the $2.1 billion reported in Q3-05.

Communications

Our Skype business continued to grow at an impressive pace, driven by rapid user growth and continued innovation of Skype's hardware and software ecosystem.

Skype net revenues totaled $50 million in Q3-06, representing a 13% increase from the $44 million reported in Q2-06.

Skype had 136 million registered users at the end of Q3-06, representing a 20% increase from the 113 million users at the end of Q2-06.

Other selected financial results

Operating Margin -- GAAP operating margin decreased to 23% in Q3-06, down from 32% in Q3-05. Excluding stock-based compensation of $74 million, GAAP operating margin would have been 28%, down from 32% in Q3-05. Non-GAAP operating margin decreased to 32% in Q3-06, down from 36% in Q3-05. The year-over-year decrease in non-GAAP operating margin was driven primarily by the inclusion of the Skype business, investment in site operations capacity and higher costs for our consumer protection programs.

Tax Rate -- The GAAP effective tax rate for Q3-06 was 26%, a decrease from 34% for Q3-05 and consistent with Q2-06. The non-GAAP effective tax rate in Q3-06 was 27%, a decrease from 34% for Q3-05 and from 28% for Q2-06. Tax rates in the prior year period were higher due to a one-time charge for the final application of tax regulations related to intercompany cost sharing arrangements. Excluding the one-time charge, the difference between the effective tax rates for Q3-06 as compared to Q3-05 and Q2-06 result primarily from changes in the estimated geographic mix of the company's taxable income.

Cash Flows -- GAAP operating cash flows increased 6% year over year to $522 million in Q3-06. Free cash flows, representing operating cash flows less net purchases of property and equipment of $137 million, decreased 14% year over year to $385 million. The decrease in free cash flow is due in part to increases in purchases of property and equipment, primarily related to data center and software investments to support capacity expansion in our business, and capitalized product development costs related to our websites.

Cash, Cash Equivalents, and Investments -- The company's cash, cash equivalents, and investments totaled approximately $3.8 billion at the end of Q3-06.

"We're pleased with the solid revenue growth, strong earnings and cash flow we delivered in Q3," said Bob Swan, Chief Financial Officer. "Our long-term confidence in the business is underscored by the significant share repurchase we executed in the quarter."

Business Outlook

The following guidance includes the estimated impact of expensing stock options from the adoption of FAS 123R, which has been reflected in eBay's operating results beginning in Q1-06.

Fourth Quarter 2006 -- eBay expects consolidated net revenues for Q4 2006 to be in the range of $1.615 billion to $1.675 billion. GAAP earnings per diluted share for Q4 2006 are expected to be in the range of $0.21 to $0.22. GAAP earnings per diluted share for Q4 2006 includes the estimated impact of stock-based compensation from the adoption of FAS 123R of approximately $0.03-$0.04. Non-GAAP earnings per diluted share for Q4 2006 are expected to be in the range of $0.27 to $0.28. This guidance assumes a US dollar to Euro exchange rate of $1.25.

Full Year 2006 -- eBay expects consolidated net revenues 2006 to be in the range of $5.865 billion to $5.925 billion. GAAP earnings per diluted share for 2006 are expected to be in the range of $0.75 to $0.76. GAAP earnings per diluted share for 2006 includes the estimated impact of stock-based compensation from the adoption of FAS 123R of approximately $0.15 to $0.16 per diluted share. Non-GAAP earnings per diluted share for 2006 are expected to be in the range of $1.01 to $1.02. This guidance assumes a Q4 2006 US dollar to Euro exchange rate of $1.25, and actual rates through the first three quarters of 2006.

Full Year 2007 -- eBay expects organic consolidated net revenue growth for 2007 in the range of 17% to 21% over 2006 revenues. GAAP and non-GAAP operating margins are expected to improve by at least 0.5 percentage points over 2006 GAAP and non-GAAP operating margins. GAAP and non-GAAP diluted earnings per share are expected to grow by at least 20% over 2006 GAAP and non-GAAP earnings per share. This guidance assumes a US dollar to Euro exchange rate of $1.25 and does not reflect the adoption of FASB Interpretation No. 48 Accounting for Uncertainty in Income Taxes (FIN 48). We are currently evaluating the impact of adopting FIN 48 (which will be effective January 1, 2007) on our consolidated financial position and results of operations.

[pre]                              eBay Inc.
            Unaudited Condensed Consolidated Balance Sheet
                            (In Thousands)
                                            December 31, September 30,
                                                2005        2006
                                            ------------ -------------
                    ASSETS
Current assets
  Cash and cash equivalents                $ 1,313,580  $ 2,482,257
  Short-term investments                      774,650      741,655
  Accounts receivable, net                    322,788      366,631
  Funds receivable from customers              255,282      307,154
  Restricted cash and investments              29,702        33,078
  Other current assets                        487,235      843,908
                                            ------------ -------------
    Total current assets                    3,183,237    4,774,683
Long-term investments                          825,667      538,875
Property and equipment, net                    801,602      999,214
Goodwill                                      6,120,079    6,407,973
Intangible assets, net                          823,280      719,302
Other assets                                    35,121        23,071
                                            ------------ -------------
                                            $11,788,986  $13,463,118
                                            ============ =============
    LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Accounts payable                        $    55,692  $  122,287
  Funds payable and amounts due to
    customers                                  586,651      973,541
  Accrued expenses and other current
    liabilities                                578,557      620,078
  Deferred revenue and customer advances        81,940      117,791
  Income taxes payable                        182,095      386,988
                                            ------------ -------------
    Total current liabilities                1,484,935    2,220,685
Deferred tax liabilities, net                  215,682      102,122
Other liabilities                                40,388        37,444
                                            ------------ -------------
    Total liabilities                        1,741,005    2,360,251
                                            ------------ -------------
Total stockholders' equity                  10,047,981    11,102,867
                                            ------------ -------------
                                            $11,788,986  $13,463,118
                                            ============ =============

                              eBay Inc.
        Unaudited Condensed Consolidated Statement of Income
              (In Thousands, Except Per Share Amounts)

                        Three Months Ended      Nine Months Ended
                            September 30,          September 30,
                      ----------------------- -----------------------
                          2005        2006        2005        2006
                      ----------- ----------- ----------- -----------
Net revenues (2)      $1,105,515  $1,448,637  $3,223,542  $4,249,840
Cost of net revenues
(1)                      200,375    315,717    578,584    886,764
                      ----------- ----------- ----------- -----------
  Gross profit          905,140  1,132,920  2,644,958  3,363,076
                      ----------- ----------- ----------- -----------
Operating expenses
(1):
Sales and marketing      293,746    394,820    852,239  1,193,382
Product development      78,881    120,405    224,309    363,447
General and
  administrative          146,578    227,188    419,598    667,785
Amortization of
  acquired intangible
  assets                  29,199      51,474      77,516    165,391
                      ----------- ----------- ----------- -----------
  Total operating
    expenses              548,404    793,887  1,573,662  2,390,005
                      ----------- ----------- ----------- -----------
Income from operations
(3)                      356,736    339,033  1,071,296    973,071
Interest and other
income, net              30,657      41,231      85,585      92,621
Interest expense            (431)      (553)    (2,556)    (2,229)
                      ----------- ----------- ----------- -----------
Income before income
taxes and minority
interests                386,962    379,711  1,154,325  1,063,463
Provision for income
taxes                  (131,989)    (98,814)  (351,455)  (284,288)
Minority interests            (2)        (1)        (48)        (3)
                      ----------- ----------- ----------- -----------
Net income            $  254,971  $  280,896  $  802,822  $  779,172
                      =========== =========== =========== ===========

Net income per share:
Basic                $    0.19  $    0.20  $    0.59  $    0.55
                      =========== =========== =========== ===========
Diluted              $    0.18  $    0.20  $    0.58  $    0.54
                      =========== =========== =========== ===========
Weighted average
shares:
Basic                  1,357,239  1,406,382  1,350,836  1,405,837
                      =========== =========== =========== ===========
Diluted                1,387,038  1,426,112  1,383,024  1,433,247
                      =========== =========== =========== ===========

(1) Includes stock-
based compensation as
follows (2006
increases are due
primarily to the
adoption of FAS
123R):
  Cost of net
    revenues          $      201  $    8,001  $      279  $  25,108
  Sales and marketing        396      23,149        396      74,933
  Product development      1,224      19,010        825      62,702
  General and
    administrative          3,504      23,359      7,471      80,002
                      ----------- ----------- ----------- -----------
        Total stock-
          based
          compensation $    5,325  $  73,519  $    8,971  $  242,745
                      =========== =========== =========== ===========

(2) Net revenues in the three-month period ended Q3-06 were positively
impacted by foreign currency translation of $28.6 million compared to
the same period of the prior year. Net revenues in the nine-month
period ended Q3-06 were negatively impacted by foreign currency
translation of $22.2 million, compared to the same period of the
prior year. On a sequential basis, Q3-06 net revenues were positively
impacted by foreign currency translation of $8.7 million.

(3) Operating income in the three-month period ended Q3-06 was
positively impacted by foreign currency translation of $12.0 million,
compared to the same period of the prior year. Operating income in
the nine-month period ended Q3-06 was negatively impacted by foreign
currency translation of $16.2 million, compared to the same period of
the prior year. On a sequential basis, Q3-06 operating income was
positively impacted by foreign currency translation of $4.1 million.

                              eBay Inc.
      Unaudited Condensed Consolidated Statement of Cash Flows
                            (In Thousands)

                        Three Months Ended      Nine Months Ended
                          September 30,          September 30,
                      ----------------------- ------------------------
                        2005        2006        2005        2006
                      ----------- ----------- ------------ -----------
Cash flows from
operating
activities:
Net income          $  254,971  $  280,896  $  802,822  $  779,172
Adjustments:
  Provision for
    doubtful accounts
    and authorized
    credits              20,932      22,319      65,653      74,193
  Provision for
    transaction
    losses                15,821      31,790      46,956      81,696
  Depreciation and
    amortization          91,902    135,224      256,867    400,936
  Stock-based
    compensation
    related to stock
    options and
    employee stock
    purchases              5,325      73,519        8,971    242,745
  Tax benefit on the
    exercise of
    employee stock
    options              61,565      18,266      172,164    108,790
  Excess tax
    benefits from
    stock-based
    compensation              --    (16,290)          --    (77,263)
  Minority interests        (28)          1          --          3
  Changes in assets
    and liabilities,
    net of
    acquisition
    effects:
    Accounts
      receivable        (11,853)    (79,433)    (83,235)  (117,031)
    Funds receivable
      from customers    (10,538)    (88,182)    (84,692)    (54,372)
    Other current
      assets            (11,111)  (205,787)    (23,667)  (339,278)
    Other non-
      current assets      2,186      2,092      (6,564)    10,869
    Accounts payable    (8,237)    (11,391)      (5,238)    63,901
    Funds payable
      and amounts due
      to customers        11,052    307,451      192,877    387,466
    Accrued expenses
      and other
      liabilities        10,455    (24,509)      (3,276)    (50,233)
    Deferred revenue
      and customer
      advances            2,201      12,000      (4,394)    36,664
    Income taxes
      payable            (5,336)    182,304      18,586    205,029
    Deferred tax
      liabilities,
      net                62,396    (118,157)    129,824    (131,457)
                      ----------- ----------- ------------ -----------
Net cash provided by
operating activities    491,703    522,113    1,483,654  1,621,830
                      ----------- ----------- ------------ -----------
Cash flows from
investing
activities:
  Purchases of
  property and
  equipment, net        (70,471)  (136,867)    (240,534)  (418,875)
  Proceeds from sale
  of corporate
  aircraft              28,290          --      28,290          --
  Purchases of
  investments          (195,230)    (56,189)    (849,851)  (547,413)
  Maturities and
  sales of
  investments          541,488    121,120    1,335,128    882,279
  Acquisitions, net
  of cash acquired    (592,130)        --  (1,118,744)    (45,505)
  Other                    (622)    (7,551)      (2,575)    (8,796)
                      ----------- ----------- ------------ -----------
Net cash used in
investing activities  (288,675)    (79,487)    (848,286)  (138,310)
                      ----------- ----------- ------------ -----------
Cash flows from
financing
activities:
  Proceeds from
  issuance of common
  stock, net            124,718      34,074      384,384    209,075
  Repurchases of
  common stock              --    (666,541)          --    (666,541)
  Excess tax benefits
  from stock-based
  compensation              --      16,290          --      77,263
  Payment of
  headquarters
  facility lease
  obligation                --          --    (126,390)        --
  Principal payments
  on long-term
  obligations                --          --      (1,849)        --
                      ----------- ----------- ------------ -----------
Net cash provided by
(used in) financing
activities              124,718    (616,177)    256,145    (380,203)
                      ----------- ----------- ------------ -----------

Effect of exchange
rate changes on cash
and cash equivalents    (2,797)    21,427      (40,960)    65,360
                      ----------- ----------- ------------ -----------

Net increase
(decrease) in cash
equivalents            324,949    (152,124)    850,553  1,168,677
Cash and cash
equivalents at
beginning of period  1,855,649  2,634,381    1,330,045  1,313,580
                      ----------- ----------- ------------ -----------
Cash and cash
equivalents at end
of period            $2,180,598  $2,482,257  $ 2,180,598  $2,482,257
                      =========== =========== ============ ===========

Supplemental Non-GAAP
Measure:
Net cash provided by
operating activities $  491,703  $  522,113  $ 1,483,654  $1,621,830
Less: Purchases of
property and
equipment, net          (42,181)  (136,867)    (212,244)  (418,875)
Less: Payment of
headquarters
facility lease
obligation                  --          --    (126,390)        --
                      ----------- ----------- ------------ -----------
Free cash flow        $  449,522  $  385,246  $ 1,145,020  $1,202,955
                      =========== =========== ============ ===========
[/pre]