SAN FRANCISCO – EBay Inc. (EBAY) on Wednesday reported quarterly net profit surged 53 percent and raised its forecast for the current quarter, driven by results in the United States and Germany, and its shares rose 12 percent.
The strong results appeared to allay concerns about slowing growth and potential competition at the world's largest online marketplace.
EBay, which has become a global trading platform for everything from kitschy collectibles and classic automobiles to farming equipment, had strong growth overseas. It is aggressively expanding in Europe and Asia, particularly in China.
"Excellent momentum in the U.S. and Germany, as well as at PayPal, all helped deliver an impressive jump in revenues and profit," said eBay Chief Executive Meg Whitman (search).
Revenue in the United States rose 27 percent to $423.6 million in the second quarter from a year ago — faster than the 20 percent gain in the first quarter — while revenue outside the United States increased 51 percent to $418.8 million.
The San Jose, Calif.-based company said second-quarter net income rose to $291.6 million, or 21 cents a share, from a year-earlier net profit of $190.4 million, or 14 cents a share. Adjusted profit excluding some items was 22 cents per share.
Revenue rose 40 percent to $1.09 billion from $773.4 million.
"Nice beats both on the top line and the bottom line," said Scott Kessler, Standard & Poor's (search) Internet equity analyst. "EBay beat expectations and modestly raised guidance, but that was done given the backdrop of greater skepticism about the quarter and eBay's fundamentals."
EBay's second-quarter results came in ahead of analysts' average targets of $1.04 billion in revenue, 17 cents per share net earnings, and adjusted earnings per share of 18 cents, according to Reuters Estimates.
EBay boosted its third-quarter revenue forecast to a range of $1.05 billion to $1.07 billion from $1.04 billion to $1.06 billion previously.
It also raised its net earnings forecast for the third quarter to 18 cents a share, compared with a range of 16 cents to 17 cents previously. For earnings excluding items, the company forecast 19 cents, versus its previous estimate of 18 cents to 19 cents a share.
Analysts' estimates had been for third-quarter revenue of $1.06 billion, net earnings of 17 cents a share and earnings before items of 18 cents.
"It's a very aggressive increase in guidance," eBay Chief Financial Officer Rajiv Dutta told Reuters, referring to the company's new revenue guidance. It incorporates expectations for a stronger U.S. dollar. The formerly weaker dollar had boosted eBay's overseas revenue in earlier quarters.
EBay, with a market capitalization of $47.7 billion, recently was replaced by Web search leader Google Inc. as the Internet's most valuable company. Google's valuation is $86 billion.
Shares of eBay trade at a multiple of 35.2 times 2006 estimated earnings, versus Google's multiple of 45.7.
Shares of eBay rose in extended trading on the Inet electronic brokerage network 12 percent to $39.15. In regular trade, shares of eBay fell 50 cents, or 1.4 percent, to close at $34.87 on Nasdaq.