Capital Gazette wins special Pulitzer Prize citation for coverage of newsroom shooting that killed five

eBay's shares leap $82.625, Amazon's climb $10.5313; Investors dance to 4th-quarter music from 2 Internet stars; Cyber-enthusiasm


SAN JOSE, Calif. -- Shares of Internet auctioneer eBay Inc. and online bookseller Inc. surged yesterday after the companies reported fourth-quarter results that exceeded expectations.

eBay climbed $82.625, or 37 percent, to close at $303.50. gained $10.5313, or 9.2 percent, to $125.625, in trading of 17.5 million shares, making it the seventh-most-active stock in U.S. markets.

San Jose-based eBay said late Tuesday that its profit before a charge rose 13-fold, and the company declared a 3-for-1 stock split.'s loss widened less than expected and sales quadrupled.

Shares of the companies have soared as they aggressively advertise their World Wide Web sites to attract first-time shoppers and expand services to keep buyers returning. eBay's market value has soared 17-fold, to $12.2 billion, since it first sold stock in September.'s market value has tripled in the same period to $19.9 billion.

"E-commerce is growing in popularity; people are more comfortable shopping on the Web, and some prefer it," said Steve Weinstein, an analyst at Pacific Crest Securities Inc.

Investor optimism has pushed eBay's market value to eight times that of auctioneer and art dealer Sotheby's Holdings Inc. Amazon's market value is five times higher than the combined value of rivals Borders Group Inc. and Barnes & Noble Inc.

Amazon's fourth-quarter revenue was a little more than one-third of Barnes & Noble's $674.1 million in its recently reported third quarter. eBay's fourth-quarter revenue of $19.5 million compared with Sotheby's $51 million in revenue in the third quarter.

The better-than-expected results helped lift shares of other Internet companies yesterday. Excite Inc. rose $6.125, to $107.50; @Home Corp. rose $6.125, to $116; and Inc. rose $13.1875, to $151.9375.

eBay, which lets individuals and small businesses use Internet auctions to buy and sell merchandise ranging from Beanie Babies to baseball memorabilia, impressed analysts and investors with the growth of its service. It conducted 48 percent more auctions than in the previous quarter.

Analysts expect Internet companies' spending to decrease over time, which will help boost their profit.

"We have never doubted whether electronic commerce would take off," said Sara Zeilstra, an analyst at Warburg Dillon Read Inc. "It's not a matter of whether revenue would grow. We're looking at levels of spending."

eBay said its profit before charges rose to $2.8 million, or 7 cents a share, compared with a profit of $214,000, or 1 cent, in the year-earlier quarter. Analysts had expected it to earn 4 cents a share.

Revenue rose more than eight-fold, to $19.5 million from $2.63 million.

Seattle-based also bolstered analysts' expectations by elaborating on its strategy of boosting sales by expanding into other products.

"The Internet is about volume," Weinstein said. "Few companies can bring the scale that an Amazon can." said its fourth-quarter loss before a charge was $22.2 million, or 14 cents a share on a pro forma basis. It had a year-earlier loss of $10.8 million, or 8 cents.

Including a charge of $24.2 million for costs related to acquisitions, it lost $46.4 million, or 30 cents a share.

Analysts expected to lose 18 cents pro forma.

Pub Date: 1/28/99

Copyright © 2019, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad