EBay Sales Up 35 Percent, Profit Down 3 Percent: STOCK DROPS AS FORECAST RATTLES INVESTORS

By Elise Ackerman, San Jose Mercury News, Calif.

Apr. 19–EBay on Wednesday said first quarter revenues grew 35 percent from a year earlier but offered a forecast for future growth that disappointed investors and sent shares in the online marketer tumbling in after-hours trading.

EBay reported first quarter revenues of $1.39 billion, slightly higher than it had forecast. Net income dropped 3 percent from a year earlier to $248.3 million, or 17 cents a share, reflecting a change in how the company accounted for the cost of employee stock grants.

Excluding stock-based compensation, net income would have increased 20 percent to $306.6 million, or 21 cents a share, the company said.

While the results reflected the continued growth of eBay’s online marketplace, the company’s forecast of an annual net income of 65 to 71 cents per share was lower than Wall Street analysts had been expecting.

Shares in the San Jose company fell more than 5 percent to $38.30 a share in the wake of the earnings release.

Contact Elise Ackerman at eackerman@mercurynews.com or (408) 271-3774.

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