Still worth a bid

16 October 2008 By Jeff Segal

The online auctioneer expects falling sales and a terrible holiday season next quarter. But its diversification and balance sheet should provide a cushion. It s still trading at a huge discount to other retailers. Ebay will feel pain but looks too cheap.

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Ebay announced earnings for the third quarter ended September 30 yesterday. The company earned $492m, or 38 cents per share, beating analysts' average expectations, on 2.12bn in revenues.

Ebay provided lowered guidance for the fourth quarter, expecting profits of 25 to 27 cents per share, well below last year's fourth quarter earnings of 39 cents per share. The company also sees its revenue falling to the range of $2.02bn to $2.17bn.

Shares in the online auctioneer were down 6% in afterhours trading, giving it a drop of 19.6% for the day.

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