Updated from 10 a.m.

eBay's ( EBAY) shares took on water Thursday and the company's reputation for conservatism did little to dam the flow.

The online auctioneer, which posted a solid third quarter and named a trusted lieutenant to oversee an acquisition Wednesday, saw its shares slide 5%, thanks to poorly received 2006 guidance. The decline came, even as analysts at CSFB and Citigroup reiterated buys on the stock, noting that eBay has low-balled forecasts in the past.

After the bell, the world's largest Web auction site posted a 40% profit gain and a 37% rise in sales for its quarter ended Sept. 30. The numbers matched the Wall Street analyst consensus estimates.

San Jose, Calif.-based eBay also named its longtime finance chief, Rajiv Dutta, president of its recently acquired Skype unit, and offered fourth-quarter and 2006 guidance that was mostly in line with expectations. But Wall Street roared its disapproval.

"For some reason, people had their hopes much higher than this, especially for the guidance," Safa Rashtchy, an analyst with Pipper Jaffray who rates eBay shares as market perform and doesn't own them, said late Wednesday. "Everything seems to be in line."

Goldman Sachs analyst Anthony Noto, who rates the shares outperform, described eBay's guidance as conservative in a note to clients Thursday. "Over the past four years, eBay has outperformed its original guidance by 13%," he wrote. "In addition, this is the first time in several years that EBay has provided EPS guidance that is not below our estimates."

Shares of eBay fell $2.11 Thursday to $39.90.

For the third quarter, net income rose to $255 million, or 18 cents a share, from the year-ago $182 million, or 13 cents a share. On a pro forma basis, excluding certain costs, earnings were 20 cents a share, a penny ahead of eBay's target and in line with the Thomson First Call estimate. Sales hit $1.1 billion, beating the $1.08 billion target.

"We saw very strong growth across every part of our business," said CEO Meg Whitman in a press release. "It's wonderful to see such strength in our two largest marketplaces, the U.S. and Germany."

"Overall, revenue, profit and cash exceeded our expectations quite strongly," Dutta said in an interview. "It was really driven by the acceleration in the U.S. business and the German business. PayPal overall had an extraordinary quarter."

eBay said gross merchandise volume, representing the value of all successfully closed items on eBay's trading platforms, rose 30% from a year ago to $10.8 billion. Total payments accounts at PayPal rose 53% to 86.6 million, and total payment volume, reflecting the dollar volume of payments initiated through the PayPal system, jumped 44% to a record $6.7 billion.

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