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eBay Earnings Preview


Do your own homework, Marv!


After Wednesday's close eBay will report its Q1 (Mar) results.

Consensus estimates for that period, Q2 (Jun), FY05 (Dec) and FY06 (Dec) are as follows:

  • Q1 '05, looking for $0.18 EPS on revs of $1.03 bln
  • Q2 '05 looking for $0.18 EPS on revs of $1.04 bln
  • FY '05 looking for $0.76 EPS on Revs of $4.35 bln
  • FY '06 looking for $1.01 EPS on Revs of $5.56 bln

Conference call scheduled for 5:00 PM ET: (888) 283.6901

What EBAY said after Q4 (Dec) report

Jan. 19 - for Q1 (Mar) sees EPS of $0.34-0.35 on revs of $1.01-1.03 bln (Reuters Estimates consensus at the time was $0.40 and $1.05 bln); for Q2 sees EPS of $0.34-0.35 on revs of $1.025-1.04 bln (Reuters Estimates consensus at the time was $0.38 and $1.047 bln); for Q3 sees EPS of $0.35-0.36 on revs of $1.035-1.06 bln (Reuters Estimates consensus at the time was $0.38 and $1.07 bln); for Q4 sees EPS of $0.43-0.44 on revs of $1.18-1.22 bln (Reuters Estimates consensus at the time was $0.46 and $1.24 bln.

Feb. 7 - and will lower the minimum insertion fees for auction-style listings and fixed price categories, among others, from 30 cents to 25 cents. The company says it's standing by its move to hike final value fees on store inventory format listings, but it will credit $15.95 in May to all sellers who operated an eBay Store in April. The company is also expanding telephone support to provide access to all eBay Stores owners beginning April 1

Feb. 10 - Co reaffirms guidance for the full year 2005. As previously stated by the co on Jan 19, it expects consolidated net revs for 2005 to fall in the range of $4.25-$4.35 bln. Co estimates GAAP EPS to fall in the range of $1.37-$1.41, and pro forma EPS to fall in the range of $1.48-$1.52. These statements assume that the pending acquisition of will close in Feb 2005

In Focus

  • Rate of domestic / international growth
  • eBay motors performance
  • PayPal contribution
  • Operating margins
  • Guidance

A Taste of What Analysts Are Saying (if you care at all)

J.P. Morgan (Apr. 19) - Quarter to date, we estimate there have been 80.5M new listings (inc. Stores) on a worldwide basis, up 30% Y/Y and 13% Q/Q. We estimate there have been 74.5M new listings on eBay's platforms in the US (inc. Motors), UK, and Germany. We are modeling 435M new listings for Q2'05, revenues of $1.035B, and EPS of $0.17. We believe preliminary listings for the quarter are tracking in line with expectations... We believe that better than expected revenue growth and improving margins will lead to multiple expansion and relative stock price outperformance.

Pacific Growth Equities (Apr. 15) - ...our revenue and PF EPS estimates of $1.038B and $0.18, respectively... Importantly, we expect Q1 results to reveal additional signs of degradation in the underlying metrics of eBay's business... we do not expect China to be a material "outperformer" for eBay in the quarter and see little chance that PayPal off-eBay is a significant source of upside in Q1. Lastly, we think that the weakening U.S. dollar could contribute incremental revenue of $5M, or more, relative to Q4:04... we think management's outlook for the remainder of 2005 could be neutral-to-negative... Our view seems a bit at odds with the Street, given that current 2005 consensus revenue/PF EPS forecasts of $4.36B/$0.77 (versus our estimates of $4.34B/$0.76) are already set above the high end of management's guidance of $4.35B/$0.76. Reflecting this fact, we think even a slight softening of management's outlook could result in a round of estimate reductions for 2005 and beyond.

Jefferies & Co. (Apr. 15) - Our 1Q05 estimates are for revenue of $1.037B and cash EPS of $0.18... Based on our weekly tracking of eBay data for 1Q05, we estimate total listings at roughly 433 mln... We estimate growth continues to decelerate with international listings up 63% and domestic up 14% YoY... Gross merchandise volume should come in at around $10.86B , up 35% y/y and 11% sequentially... We estimate the take rate (avg. commission per item) for 1Q05 at 7.24%, down from 4Q04's 7.31%... We expect management to reiterate 2Q05 and FY05 guidance with revenue of $1.025-1.040B and $4.25-4.35B, GAAP EPS of $0.16-0.17, and $0.69-0.71, and recurring cash EPS of $0.17-0.18 and $0.74-0.76, respectively.

Legg Mason (Apr. 14) - We believe the quarter to be in line and believe that if there is risk to guidance that it is possible that the second quarter may be a penny light. Even in this scenario, we believe it is quite possible that eBay shares trade up on the news given the possibility that this almost 50% decline (from Q4 highs) is pricing in such an event. We believe that eBay shares are a core holding for investors looking for exposure to the high-growth online commerce sector, however, we have historically been reluctant to recommend shares due to valuation. We believe the valuation issue has mostly been cured.

CIBC World Markets (Apr. 12) - We expect 1Q EPS of $0.19... Our estimate assumes revenue growth of 37% to $1.04 billion, driven by strength in international revenues (+58%) and in PayPal (+41%), offsetting slowing growth in the U.S. division (+18%)..... Our proprietary analysis of eBay listings data suggests worldwide listings growth (including eBay stores) in the 32%-35% range. We expect U.S. listings growth in the high teens (mostly due to eBay stores), and international listings growth ~50%... We expect pro forma operating margins to decline to 34.3% from 37.9% last year... Looking ahead, we believe management will remain conservative on its outlook for the 2Q and FY'05.... For FY05 our EPS estimate of $0.79 factors revenue growth of 35% yr/yr to $4.42 billion (vs. guidance of $4.35B) with a 30 bps decline in pro forma operating margin to 34.8% vs. last year

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