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Contributors: Douglas McIntyre Jon C. Ogg

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Thursday, October 19, 2006

eBay"s Mixed Results

eBay (EBAY) came in with $0.26 non-GAAP and $1.449 Billion in revenues; and that compares to street expectations of $0.24 & $1.43 Billion. GAAP EPS was put at $0.20.

It gave guidance for next quarter of EPS $0.27-0.28 and revenues $1.615-1.675 Billion and that compares to $0.29 EPS & $1.66 Billion in revenues. So it is lowering the ranges, but the street is treating it as a surviving quarter for now.

Gross Merchandise Value was listed for Q3 at $12.6 Billion, up from last year but down from last year's $13 Billion.

Longer GUIDANCE: The 2006 guidance was non-GAAP earnings per diluted share for 2006 are expected to be in the range of $1.01 to $1.02 and revenues of $5.865 billion to $5.925 billion. GAAP earnings per diluted share for 2006 are expected to be in the range of $0.75 to $0.76. For 2007 Full net revenue growth for 2007 in the range of 17% to 21% over 2006 revenues. GAAP and non-GAAP operating margins are expected to improve by at least 0.5 percentage points over 2006. GAAP and non-GAAP diluted earnings per share are expected to grow by at least 20% over 2006 GAAP and non-GAAP earnings per share. So on an implied basis we would see EBAY 2007 EPS target at $1.21 to $1.23, but the street estimate is $1.25.

Reaction: Shares closed down 1% at $28.49 in regular trading. The shares fell an initial 3% right after guidance came out, but bounced back up to about $28.75 (up almost 1%).

Jon C. Ogg

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