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Wall Street slaps eBay for missing 04 target

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Share in online auctioneers eBay took a tumble yesterday after the company warned that earnings would not meet Wall Street expectations for 2004. Market confidence was dented despite a quarter of growth which beat eBay’s own, and Wall Street’s expectations.

eBay said its earnings for 2004 would reach $3.185bn. Wall Street was expecting $3.2bn.

Shares fell four per cent during the day, and another six per cent in after market trading. eBay’s shares have lost around 20 per cent of their value in recent weeks, a trend echoed by other Internet stocks such as Yahoo and Amazon.com.

Overall, revenue growth beat expectations, hitting $773m. Business outside the US is good: up 76 per cent on the same period last year and now accounting for nearly half (46 per cent) of the company’s transactional revenues. Sales in the US also grew, but more slowly at 32 per cent.

Profit was also up - not surprising, given the revenue growth and relatively low costs of expansion. Net income for the quarter doubled to reach $190m.

CEO Meg Whitman said: "We're more confident than ever in the long-term potential of our business." ®

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