eBay Guidance Deemed Conservative? (EBAY)

eBay Inc. (NASDAQ:EBAY) posted earnings of $0.34 non-GAAP EPS on $1.83 Billion in revenues, compared to estimates from First Call of $0.32 EPS & $1.78 Billion revenues. The company also gave us guidance, and based on the reaction Wall Street is deeming this as somewhat conservative: Q3 non-GAAP EPS $0.31 to $0.33 on revenues of $1.775 Billion to $1.825 billion; Fiscal 2007 non-GAAP EPS $1.34 to $1.38 and revenues $7.3 to $7.45 Billion. 

ESTIMATES: First Call estimates $0.32 EPS and $1.79 Billion revenues.  Fiscal 2007 estimates are $1.34 EPS & $7.4 Billion in revenues.  If the company gives a 2008 internal business plan, the street has $1.58 EPS and $8.7 Billion, and that translates to a forward 18% EPS growth and 17.5% revenue growth.

The company purchased approximately 10 million shares of its common stock at a total cost of approximately $344 million during the quarter out of its authorized stock repurchase program of up to $2 billion by January 2009.  eBay’s users posted a total of 559 million listings in Q2-07, 6% lower than the 596 million listings posted in Q2-06; Gross Merchandise Volume (GMV) of $14.46 billion in Q2-07, representing a 12% year-over-year increase from the $12.90 billion reported in Q2-06.  The company also noted that Skype continues to grow rapidly and posted another quarter of profitability.

eBay shares are up less than 1% at $34.35 after a few minutes of after-hours trading, although shares were up more than 2% briefly.  We’ll have to see how the "valuation calls" work out tomorrow morning.

Jon C. Ogg
July 18, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.