eBay's Stellar '03

What else can you say about eBay (Nasdaq: EBAY), except that it was another great year for the world's top online marketplace? The fourth-quarter and full-year results released after the bell yesterday show a company still in hyper-growth phase, with great promise for the future.

In fact, eBay's sales are growing faster than revenues did at Wal-Mart (NYSE: WMT), Microsoft (Nasdaq: MSFT), Dell (Nasdaq: DELL), and Cisco (Nasdaq: CSCO) at comparable ages, according to CEO Meg Whitman.

Looking at the fourth quarter, revenue climbed 57% to $648.4 million. That translated into GAAP earnings of $0.21 per share, a 50% jump over the same period last year. Excluding the effects of an accounting change and other unusual items, the company earned $0.24.

The strength of the business shines through in the 2003 numbers. Here's a look at the growth in various key areas:

• Gross merchandise sales, the value of all items sold on the site, totaled $23.8 billion in 2003, a 60% increase over 2002.
  
  
• International users generated $3 billion in gross merchandise sales, up 85%.
  
  
• Gross merchandise sales on eBay Motors jumped 75%.
  
  
• Registered users grew to nearly 95 million, an increase of 54%.
  
  
• Active users increased to 41.2 million, up 49%.
  
  
• More than 970 million items were listed, which is a 52% increase.
  
  
• There are now more than 40 million PayPal accounts, 73% more than last year.
  
  
• Total payment volume at PayPal reached $12.2 billion, an increase of 73%.
  
  
• Net revenues totaled $2.2 billion, up 78%.
  
  
• Free cash flow of $508.8 million represents a 49% increase over 2002.
  

On top of these key metrics, one out of every three Internet users logged on to eBay during the holiday season. "We had 51 million unique visitors come to the site in December," said Whitman in a conference call, "which is a record for eBay. It makes us the No. 1 shopping destination in the United States." (Transcript provided by CCBN StreetEvents.)

What lies ahead? With all the momentum, management is raising pro forma earnings guidance for 2004 to $1.04 per share on approximately $3 billion in revenue. The news has driven the stock price up about 6% today to more than $68 -- some 70% higher than its trading price last January.

The bottom line on the company is the same as it has been for nearly every quarter since it went public: Still firing on all cylinders, still trading at a hefty premium.

Rex Moore owns shares of eBay.