EBay posts record profit but is cautious about the future

NEW YORK - A cautious outlook for 2003 has resulted in analysts marking down eBay's stock today, despite posting a record profit of $109.7m and recording a 57% leap in users.

EBay recorded net revenues of $509.3m (£314.9m) for the second quarter of 2003, an increase of 91%. Despite net revenue exceeding the company's own predictions of $500m, analysts are worried about a slowdown in the US business and are disappointed that eBay has only revised its earnings for the year upward by a modest amount.

Analysts' disappointment is easy to see, given that transaction revenues grew to $496.9m, an increase of 111% from last year's figure of $235.3m, with 45% of that growth coming from the US and international growth of 146%.

Active users on the eBay platform who bid, bought or listed over the last 12 months increased to 34.1m, a 57% increase on the 21.8m users for the same period a year ago.

Two weeks ago, MSN and eBay extended their marketing agreement in a deal that allows people searching via the former's homepage being given links to relevant auctions on eBay. This followed the appointment of former Unilever interactive chief Simon Darling as marketing director to boost the site's UK customer base of 7m.

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