By
Anders Bylund (TMF Zahrim)
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More Articles
October 18, 2007
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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
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$1,448.6
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30.4%
|
|
Net Profit
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($935.6)
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$280.9
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N/A
|
|
EPS
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($0.69)
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$0.20
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N/A
|
|
Diluted Shares
|
1,354.8
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1,426.1
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(5%)
|
Get back to basics with the income statement.
Margin Checkup
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Q3 2007
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Q3 2006
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Change*
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Gross Margin
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76.4%
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78.2%
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(1.9)
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Operating Margin
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(49.6%)
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23.4%
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(73.0)
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Net Margin
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(49.5%)
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19.4%
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(68.9)
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*Expressed in percentage points.
Margins are the earnings engine.
Balance Sheet Highlights
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Assets
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Q3 2007
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Q3 2006
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Change
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|
Cash + ST Invest.
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$3,988.7
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$3,223.9
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23.7%
|
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Accounts Rec.
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$411.2
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$673.8
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(39%)
|
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Liabilities
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Q3 2007
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Q3 2006
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Change
|
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Accounts Payable
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$98.7
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$122.3
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(19.3%)
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Long-Term Debt
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$0.0
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$0.0
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N/A
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The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q3 2007
|
Q3 2006
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Change
|
|
Cash From Ops.
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$629.5
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$522.1
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20.6%
|
|
Capital Expenditures
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$119.3
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$136.9
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(12.8%)
|
|
Free Cash Flow
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$510.2
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$385.2
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32.4%
|
|
Owner Earnings
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$487.7
|
$279.3
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74.7%
|
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)
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$192,275.3
|
50.1
|
**
|
|
eBay
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$55,153.2
|
316.7*
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***
|
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Amazon.com (NASDAQ:AMZN)
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$37,433.3
|
123.3
|
**
|
|
Yahoo! (NASDAQ:YHOO)
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$35,956.2
|
55.6*
|
**
|
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ValueClick (NASDAQ:VCLK)
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$2,499.3
|
33.0
|
*****
|
|
Overstock.com (NASDAQ:OSTK)
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$701.7
|
N/A
|
*
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Source: Capital IQ (a division of Standard & Poor's) except when noted.
*Calculated to include latest quarter.
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