eBay Gets Boost From PayPal: Fool by Numbers

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On Oct. 18, eBay (Nasdaq: EBAY) released third-quarter earnings for the period ended Sept. 30.

• Revenues exceeded analyst estimates by 1.36%, but EPS missed those estimates.
• The PayPal and Skype businesses led to 31% growth in revenues.
• EPS increased by $0.02 due to the 10% increase in net profit.
• The operating margin was driven lower by the inclusion of the Skype business.
• Cash flow was reduced by expenses related to data-center and software investments to support capacity expansion.

(Figures in millions, except per-share data)

Income Statement Highlights

	Avg. Est.	Q3 2006	Q3 2005	Change
Sales	$1,429	$1,449	$1,106	31.0%
Net Profit	--	$281	$255	10.2%
EPS	$0.24	$0.20	$0.18	11.1%
Diluted Shares	--	1,426	1,387	2.8%

Get back to basics with a look at the income statement.

Margin Checkup

	Q3 2006	Q3 2005	Change*
Gross Margin	78.21%	81.87%	(3.66)
Operating Margin	23.40%	32.27%	(8.87)
Net Margin	19.39%	23.06%	(3.67)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q3 2006	Q3 2005	Change
Cash + ST Invest.	$3,224	$3,069	5.0%
Accounts Rec.	$367	$274	33.7%

Liabilities	Q3 2006	Q3 2005	Change
Accounts Payable	$56	$43	30.3%
Long-Term Debt	$0	$0	N/A

Learn the ways of the balance sheet.

Cash Flow Highlights

	Q3 2006	Q2 2005	Change
Cash From Ops.	$522	$492	6.2%
Capital Expenditures	$137	$70	94.2%
Free Cash Flow	$385	$421	(8.5%)

Find out why Fools always follow the money.

Related companies:

• Amazon.com (Nasdaq: AMZN)
• Akamai Technologies (Nasdaq: AKAM)
• Overstock (Nasdaq: OSTK)

Related Foolishness:

• Rick Munarriz comments on Q3 results
• Bidding Up eBay
• eBay Bids on Itself
• Big Advertisers Look to eBay for Help
• The Problem With eBay's "Buy It Now"

Akamai is a Rule Breakers selection . Overstock is a former recommendation of Rule Breakers and Hidden Gems. eBay and Amazon areStock Advisorrecommendations. The Fool has a newsletter for almost every type of investor.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.