SAN FRANCISCO — Benefiting from a weak dollar, online auction company eBay Inc. beat Wall Street's expectations on Wednesday, reporting a 22 percent hike in first-quarter profit and raising its outlook for the rest of the year.
EBay reported net income of $460 million, or 34 cents per share, on revenue of $2.19 billion in the quarter that ended March 31. In the year-ago quarter, eBay earned $377 million, or 27 cents per share, on revenue of $1.77 billion.
Excluding one-time items, eBay's net income was $562 million, or 42 cents per share, compared to $460 million, or 33 cents per share, in the first quarter of last year. On that basis, analysts polled by Thomson Financial expected, on average, earnings of 39 cents per share on revenue of $2.08 billion.
More than half of eBay's business _ including its core online auction, fixed-price and store listings, PayPal, Skype and classifieds _ takes place overseas. Sales in those stronger foreign currencies translate to more dollars for eBay.
EBay raised its outlook for 2008, saying it now expects revenues between $8.7 to $9 billion with earnings per share between $1.35 to $1.40. Excluding special items, it expects earnings per share between $1.70 to $1.75.
The company said it repurchased 37 million shares of its stock at a cost of $1 billion in the first quarter.
"This was a very strong financial quarter for the company," eBay Chief Executive John Donahoe said in a company statement. "The results reflect the strength provided by our diverse portfolio of businesses."
Donahoe said the company's stability and growth give it the confidence to change its products.
During the quarter, the company made several modifications aimed at boosting listings, improving buyers' experiences and making the site safer from fraud. The company changed its fee structure and feedback system, a move that some worried could dampen listings growth.
The number of listings on the site grew 10 percent over the year-ago quarter, continuing growth seen in the fourth quarter, which came after two quarters of declining listings last year.
Growth in active users, however, remained flat at 1 percent over the year-ago quarter and the growth rate has steadily declined, down from 10 percent in the year-ago quarter. The growth rate for the total value of goods for sale on eBay, or GMV, is also down slightly at 12 percent, versus 14 percent a year ago.
Analyst Tim Boyd with American Technology Research said the numbers are strong overall, but the lag in key growth metrics could be a symptom of recession.
"The market was definitely hoping to see some of these key metrics turn around," Boyd said. "What is negative is the fact that GMV growth did not accelerate, so people wanted to see that 12 percent growth go to 14 or 15 percent growth, and it didn't get there even with a lot of currency help."
The San Jose-based company also raised its outlook for the current quarter, for revenue between $2.1 billion and $2.15 billion, with earnings per share between 30 cents and 32 cents. Excluding one-time items, it expects earnings per share between 39 cents and 41 cents in the second quarter.
Shares of eBay rose 10 cents in after-hours trading Tuesday, up 1.2 percent from their closing point, $32.12, up 54 cents, or 1.7 percent, for the day.