eBay beats profit predictions

Benefiting from a weak dollar, online auction company eBay Inc. beat Wall Street’s expectations on Wednesday, reporting a 22 percent hike in first-quarter profit and raising its outlook for the rest of the year.

EBay reported net income of $460 million, or 34 cents per share, on revenue of $2.19 billion in the quarter that ended March 31. In the year-ago quarter, eBay earned $377 million, or 27 cents per share, on revenue of $1.77 billion.

Excluding one-time items, eBay’s net income was $562 million, or 42 cents per share, compared with $460 million, or 33 cents per share, in the first quarter of last year. On that basis, analysts polled by Thomson Financial expected, on average, earnings of 39 cents per share on revenue of $2.08 billion.

EBay raised its outlook for 2008, saying it now expects revenues between $8.7 billion and $9 billion with earnings per share between $1.35 to $1.40.

In other first-quarter earnings reported this week:

“Washington Mutual, the nation’s largest savings and loan, said Tuesday it lost more than $1.1 billion in the first quarter as the struggling economy and flagging real estate values pummeled the bank’s borrowers. The Seattle-based thrift lost $1.40 per share, compared with a profit of $784 million, or 86 cents per share, in the first quarter a year earlier. Washington Mutual said it needed to set aside $3.5 billion to cover bad loans in its $250 billion portfolio during the first quarter.

“Student lender Sallie Mae lost $104 million in the first quarter and fell short of Wall Street’s expectations amid a severe disruption in the student lending industry. The Reston, Va.-based company, formally SLM Corp., said it lost 28 cents a share in the first quarter. That compares with a profit of $116 million, or 26 cents per share, a year earlier.

“Whipsawed by high fuel costs and bad weather, American Airlines‘ parent company lost $328 million in the first quarter. The nation’s largest carrier posted a loss of $1.32 per share compared with a profit of $81 million, or 30 cents per share, in the same period last year. Revenue rose 5 percent to $5.7 billion, up from $5.4 billion a year earlier but a bit short of the $5.73 billion forecast by analysts.

“Quarterly profits at IBM Corp. jumped 26 percent and blew past analysts’ forecasts, with U.S. operations showing surprising strength given the faltering economy. The technology company also increased its earnings forecast for the year. IBM earned $2.32 billion, or $1.65 per share, well ahead of its profit of $1.84 billion, or $1.21 per share, in the same period of 2007. Revenue rose 11 percent to $24.5 billion.

“JPMorgan Chase & Co., which recently scooped up the toppling investment bank Bear Stearns Cos., said problems with mortgages and other loans cut its own first-quarter profit in half. The New York-based bank’s profit fell 50 percent to $2.37 billion, or 68 cents per share, on $16.9 billion in net revenue. The results would have been even worse, had it not been for a pretax gain of $1.5 billion when JPMorgan sold its shares in Visa Inc., which went public in March.

“U.S. Bancorp earnings fell 4 percent due to losses stemming from the mortgage crunch. The Minneapolis-based bank said it earned $1.09 billion, or 62 cents per share, down from $1.13 billion, or 63 cents per share, during the same period last year. Revenues were $3.87 billion, up 14 percent from $3.39 billion in the first quarter of 2007.

“The Coca-Cola Co.‘s first-quarter profit rose 19 percent due to acquisitions and overseas growth, offsetting unimpressive results in its home North America unit.

The world’s biggest beverage company said its profit was $1.5 billion, or 64 cents a share. That compared with a profit of $1.26 billion, or 54 cents a share, a year earlier. Atlanta-based Coca-Cola said it earned $1.58 billion, or 67 cents a share, in the first quarter.

“Intel Corp. shares jumped more than 6 percent after the computer chip maker reported first-quarter sales that beat Wall Street expectations and surprised some analysts for how well its core business in microprocessors held up. Intel’s net profit for the quarter was $1.44 billion, or 25 cents per share. That’s 12 percent lower than a year earlier, when Intel earned $1.64 billion, or 28 cents per share.

“Wells Fargo & Co.‘s first-quarter profit fell 11 percent as the nation’s fifth-largest bank wrestled with rising loan losses and braced for more trouble ahead. The San Francisco-based company said it earned $2 billion, or 60 cents per share. That compared with $2.24 billion, or 66 cents per share, at 2007’s outset. It marked Wells Fargo’s second straight quarter of earnings erosion. The bank’s revenue climbed 12 percent to $10.56 billion, topping analysts’ average estimates by about $150 million.

“Health products maker Johnson & Johnson reported a 40 percent jump in profit, mainly due to the weak dollar boosting foreign revenues and a charge that depressed results a year ago. The New Brunswick, N.J.-based maker of contraceptives, medical devices, baby care items and prescription drugs reported net income of $3.6 billion, or $1.26 per share, for the first three months of the year, up from $2.57 billion, or 88 cents a share, a year ago.

“Bear Stearns Cos. said its profit plunged 79 percent in the fiscal first quarter that ended just two weeks before speculation about a liquidity crisis forced its sale to JPMorgan Chase & Co. The nation’s fifth-largest investment bank posted results just shy of Wall Street projections. Earnings for the quarter ended Feb. 29 showed Bear Stearns was able to stay profitable as the credit crisis roiled on. The company posted a profit of $110 million, or 86 cents per share, down from $548 million, or $3.82 per share, a year earlier. Revenue fell to $1.48 billion from $2.48 billion a year ago.

“Wachovia Corp. is getting a lesson in “timing is everything.” The nation’s fourth-largest bank reported a $393 million first quarter loss and has been forced to cut its dividend and seek a $7 billion cash injection to make up for a poorly timed expansion of its mortgage business. The company also said it plans to cut 500 jobs in its corporate and investment bank.