eBay on Wednesday posted a sharp net loss due to a $1.39 billion write-down on the purchase of Web-based phone service Skype, but said it could meet Wall Street's most bullish full-year forecasts. The world's largest online auctioneer and payments company reported a third-quarter net loss of $936 million, or 69 cents per diluted share, compared with a profit of $281 million, or 20 cents per diluted share, in the year-earlier quarter.
Excluding the write-down and other one-time items, eBay's adjusted profit was $564 million, or 41 cents per diluted share, representing a 53 percent rise over a year ago.
Wall Street analysts, on average, had been looking for a profit, excluding the Skype write-down and some one-time items, of 33 cents per share, according to Reuters Estimates.
Revenue rose 30 percent to $1.89 billion, topping the current range of quarterly Wall Street forecasts.
"Results were driven by a combination of somewhat stronger performance in our big markets, as well as newer, faster growing businesses," President and Chief Executive Meg Whitman said. She cited top markets in the United States and Germany.
The company's effective third-quarter tax rate, excluding one-time items, was 10 percent, down from 27 percent in the same quarter a year earlier. About a penny per share of reported operating earnings came from currency translation, she said.
"A good chunk of the over-performance was execution," Whitman said, although tax benefits, foreign currency gains and ongoing share buybacks by the company also figured strongly.
Revenue from its core marketplaces business grew 26 percent from a year earlier to $1.32 billion, in line with its growth rate in the second quarter but above the 22 percent to 24 percent rate the business had seen in prior quarters.
Results in the auctions, classified merchandise and fixed-price shopping were driven by strong performance in eBay's international business, especially in Germany, as well as its PayPal Merchant Services business, which provides online payment services to sites off of eBay's own, Whitman said.
Other key contributors were StubHub, a sports and entertainment ticket reselling site it acquired this year; its classified merchandise business; and advertising deals it has with Yahoo in the United States and Google in Europe.
For 2007 as a whole, eBay said it expected earnings per share, excluding one-time items, of $1.47 to $1.49, well above the earnings Wall Street was looking for, which ranged from $1.35 to $1.41 per share, according to Reuters Estimates.
The company said it expected net revenue for 2007 in a range of $7.60 billion to $7.65 billion, well above the average analyst forecast of $7.49 billion but at the top end of the $7.41 billion-to-$7.64 billion range of analysts' forecasts.
Early this month, eBay said it would cut as much as $1.2 billion off the $4.3 billion potential price it agreed to pay when it acquired Skype in a controversial deal two years ago. Skype's two co-founders also agreed to resign as executives after the unit has repeatedly failed to reach financial goals.
In anticipation of solid results in its core business, eBay shares gained 5.2 percent to close at $40.60 in regular-session trading on Nasdaq prior to the publication of the company's report. The stock is up 35 percent so far this year. By contrast, the Nasdaq is up 15.6 percent.
