eBay's Heavy Adjustment: Fool by Numbers
By
Anders Bylund (TMF Zahrim)
October 18, 2007
|
On Oct. 17, online auctioneer eBay (Nasdaq: EBAY) released third-quarter earnings for the period ended Sept. 30.
- For more color to the numbers, read our earnings Take.
- eBay took a $1.39 billion goodwill impairment charge this quarter, to account for the failure of the Skype acquisition to add the value it was expected to. Without that non-cash item, earnings would have landed at $455.3 million, or $0.34 per share, for a 24.1% net margin.
- That charge isn't all bad. It doesn't hurt cash flow figures at all. But it's a before-tax item that helped reduce the tax load this quarter by 14 percentage points.
- All three reportable segments grew sales over last year -- including Skype, which nearly doubled its sales and generated a profit if you ignore the impairment charge.
- Today's price-to-earnings ratio started out at 317 times GAAP earnings, or 33.4 times a pro forma earnings figure.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q3 2007
|
Q3 2006
|
Change
|
|
Sales
|
$1,889.2
|
$1,448.6
|
30.4%
|
|
Net Profit
|
($935.6)
|
$280.9
|
N/A
|
|
EPS
|
($0.69)
|
$0.20
|
N/A
|
|
Diluted Shares
|
1,354.8
|
1,426.1
|
(5%)
|
Get back to basics with the income statement.
Margin Checkup
*Expressed in percentage points.
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets
|
Q3 2007
|
Q3 2006
|
Change
|
|
Cash + ST Invest.
|
$3,988.7
|
$3,223.9
|
23.7%
|
|
Accounts Rec.
|
$411.2
|
$673.8
|
(39%)
|
|
Liabilities
|
Q3 2007
|
Q3 2006
|
Change
|
|
Accounts Payable
|
$98.7
|
$122.3
|
(19.3%)
|
|
Long-Term Debt
|
$0.0
|
$0.0
|
N/A
|
The balance sheet reflects the company's health.
Cash Flow Highlights
Free cash flow is a Fool's best friend.
Competitive Context
| Company |
Market Cap (in Millions)
|
Trailing P/E Ratio
|
CAPS Rating (Out of 5)
|
|
Google (Nasdaq: GOOG)
|
$192,275.3
|
50.1
|
**
|
|
eBay
|
$55,153.2
|
316.7*
|
***
|
|
Amazon.com (Nasdaq: AMZN)
|
$37,433.3
|
123.3
|
**
|
|
Yahoo! (Nasdaq: YHOO)
|
$35,956.2
|
55.6*
|
**
|
|
ValueClick (Nasdaq: VCLK)
|
$2,499.3
|
33.0
|
*****
|
|
Overstock.com (Nasdaq: OSTK)
|
$701.7
|
N/A
|
*
|
Source: Capital IQ (a division of Standard & Poor's) except when noted.
*Calculated to include latest quarter.
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