PayPal goes from strength to strength

NEWS PayPal continued to buck the downward trend in the high-tech sector today with a quarterly profit and a three-fold jump in revenue that exceeded analysts' expectations. While IT giants Sun, Gateway and Nortel all posted disappointing results, dot-com darling PayPal posted its first profit as a publicly listed company and said it will create another 150 jobs this year. The micropayment company, which floated in February, posted a $1.2m profit, up from a $29m loss in the first quarter of 2001. On a per share basis, profits came in at four cents, beating analyst forecasts of two cents. Revenue more than tripled on the same period last year, jumping from $14m to $48m. PayPal also reported a positive outlook for the rest of the year, boosting current quarter and full year earnings forecasts. Revenue for the current quarter is now expected to be $53m. Full year revenue could total $230m. While the bulk of PayPal's business comes from auction sites such as eBay, the results showed that non-auction transactions - such as fixed price items and sales of services - grew 31 per cent in the quarter, compared with a 16 per cent growth for auction sales. Auction sales accounted for 61 per cent of business in the quarter, down from 64 per cent in the previous quarter. PayPal said it added 28,000 new accounts every day during the first quarter while overseas accounts grew to 1.3 million Shares in the company were trading at over $23 following results, after debuting at $13 almost two months ago. Earlier this week PayPal shares soared on speculation that eBay had approached it with a merger offer. However both companies denied the reports. For related news, see:
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