eBay Shares Beaten Down (Update)

SAN FRANCISCO - eBay(EBAY) disappointed investors with its dim outlook for the fourth quarter as a stronger dollar hurts its business overseas, while the company faces a weakening economy at home.

Shares of eBay were off 4.1% in after-hours trading to $14.70 after falling more than 13% in Wednesday's regular session.

The online auction site posted third-quarter earnings of $492 million, or 38 cents a share, compared with a loss of $936 million, or 69 cents a share, in last year's quarter, which included a hefty goodwill impairment charge.

Excluding certain items, eBay posted earnings of $592 million, or 46 cents a share. That topped analysts' expectations of 41 cents a share, and came in above the company's own guidance.

Revenue, however, fell short of Wall Street estimates, totaling $2.12 billion. Analysts were expecting revenue of $2.13 billion.

eBay also reported a 1% decline in gross merchandise volume in the third quarter. That marked a significant slowdown from the second quarter, when gross merchandise volume was up 8% -- and even more so in comparison to a year ago, when it was up by 14%.

For the fourth quarter, eBay expects revenue to range between $2.02 billion and $2.17 billion and earnings in the range of 39 cents a share to 41 cents a share.

That was much lower that Wall Street predictions for revenue of $2.44 billion and earnings of 47 cents a share.

eBay pointed to a number of reasons for the low forecast, including a stronger dollar that will likely hit fourth-quarter revenue by $200 million. It also cited the slowing economy and eBay's decision to pour more marketing dollars toward attracting more buyers to the site, which would cost it about $150 million.