Soft Guidance at eBay

Updated from Oct. 18

eBay (EBAY Quote) posted a 10% earnings gain for its third quarter but the online auction's guidance kept alive concerns about the company's core domestic business.

The San Jose, Calif., Internet auction giant made $281 million, or 20 cents a share, for the quarter ended Sept. 30. That's up from the year-ago $255 million, or 18 cents a share. Sales rose to $1.45 billion from $1.11 billion a year earlier.

Excluding certain costs, latest-quarter earnings were 26 cents a share.

Analysts surveyed by Thomson Financial were looking for a 24-cent profit on sales of $1.43 billion.

Shares of eBay were up $1.02, or 3.6%, to $29.51 in early Thursday trading.

"Q3 was a very good quarter for the company and a continuation of the strong earnings growth we delivered throughout the first half of the year," said CEO Meg Whitman. "As our results demonstrate, we are executing on our strategy to grow our Marketplaces, PayPal and Skype businesses individually and collectively to deliver greater value to our community of users and to our shareholders."

eBay said it expects to make 27 or 28 cents a share on a pro forma basis for the fourth quarter, on revenue of around $1.65 billion. Analysts were looking for a 29-cent profit on sales of $1.66 billion.

eBay's third-quarter earnings growth was due in part to a drop in the company's tax rate to 26% from 34% last year. Earnings before taxes fell by almost 2%.