EBay predicts bright future; raises long-term targets

While other Internet businesses struggle to swim against the currents of a global economic slowdown and a weak advertising market, online auction powerhouse eBay aimed to assure investors and users of its buoyancy this week, reaffirming its 2002 fourth quarter and full-year guidance and raising the bar for its long-term performance.

The optimistic forecasts came two weeks after eBay reported that 2002 third-quarter earnings tripled over the year-ago period, thanks to a significant hike in user transactions.

During an analyst conference Wednesday, the San Jose, California, company predicted that fourth-quarter net revenues would come in at between US$372 million and $381 million, with pro forma earnings per share of between $0.22 and $0.23.

For the full-year 2002, eBay said that it expects to take in net revenues of between $1.17 billion and $1.18 billion with pro forma earnings of between $0.81 and $0.82 a share.

The company also forecast 2003 full-year revenue of between $1.77 billion and $1.83 billion as well a 2005 revenue goal of $3 billion.

The online marketplace has benefitted from growth both in the U.S. and internationally, particularly from eBay Germany, eBay U.K. and Korea's Internet Auction Co.

The company boasted 24.2 million unique users at the end of its third quarter, excluding users of subsidiary Half.com and Internet Auction.

EBay also recently completed the acquisition of online payment system PayPal, a move it believes will continue to boost its revenue.

Looking beyond 2005, the company raised its forecasts, predicting operating margins of between 35 percent and 40 percent. EBay did not give a specific date for reaching this goal, however.

After predicting bullish performance for years to come, stock in the company (EBAY) traded up 2.30 percent to $63.95 a share Thursday.

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