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***mandy*** · (This post was last modified: 10-18-2006, 09:09 PM by regic.)

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

***mandy*** · 10-18-2006, 07:52 AM,

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/

xppman · 10-18-2006, 12:02 PM,

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

rejoicemusic · 10-18-2006, 01:33 PM,

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?

landofsmiles · 10-18-2006, 02:43 PM,

[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?

landofsmiles · 10-18-2006, 02:50 PM,

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

xppman · 10-18-2006, 02:57 PM,

;D

***regic*** · 10-18-2006, 09:13 PM,

Quote:Online marketplace eBay Inc.Â 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

***regic*** · 10-18-2006, 09:33 PM,

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.

***regic*** · 10-18-2006, 09:35 PM,

[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]