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eBay earnings up 10%, beat expectations

/ Source: The Associated Press

EBay Inc. reported Wednesday that third-quarter profit increased 10 percent from the same period last year, beating Wall Street’s moderate expectations and encouraging executives to raise earnings forecasts for the full year.

The San Jose-based online auction company earned $280.9 million, or 20 cents per share, for the three months ended Sept. 30, compared to $254.97 million, or 18 cents per share in the year-ago period.

Revenue for the third quarter totaled $1.45 billion, up 31 percent from last year’s $1.11 billion and at the high end of what Wall Street traders had expected.

Excluding charges unrelated to ongoing operations, eBay earned $367.41 million, or 26 cents per share, up nearly 24 percent from the same quarter last year, when eBay earned $280.16 million, or 20 cents per share.

On that basis, which doesn’t comply with generally accepted accounting principles, eBay was expected to earn $342.4 million, or 24 cents per share, on sales of $1.43 billion, according to analysts polled by Thomson Financial.

Excluding one-time costs, the company expects a profit of 27 cents to 28 cents per share in the fourth quarter — traditionally the company’s strongest, thanks to holiday shoppers — on revenue in the range of $1.62 billion to $1.68 billion.

For all of 2006, the company expects to earn $1.01 to $1.02 per share on revenue in the range of $5.87 billion to $5.93 billion.

That’s slightly more bullish than eBay executives were at the end of the second quarter. In July, the company said it would likely earn 98 cents to $1.01 per share in 2006 on revenue in the range of $5.7 billion to $5.9 billion.

EBay shares closed Wednesday at $28.50, down 28 cents, or nearly 1 percent, before the earnings report was released. The stock has traded in a 52-week range between $22.83 and $47.86.