NEW YORK ( TheStreet) --Shares of Internet giant eBay ( EBAY) rose in after-hours trading, as the company saw exceptional growth in its payments division, PayPal. eBay also added $2 billion to its share buyback program.

eBay saw a huge growth in PayPal revenue, which rose 26% year-over-year, as the mobile payment story continues to play out. PayPal generated $1.357 billion for the quarter.

The San Jose, Calif.-based company reported earnings of 56 cents per share on $3.39 billion in revenue. Analysts polled by Thomson Reuters were looking for 55 cents per share in earnings on $3.41 billion in revenue.

CEO John Donahoe was particularly pleased with the quarter, as eBay Marketplace had its "best performance in years," He noted the growth at PayPal and strong same-store-sales growth for its GSI unit also helped during the quarter.

"Our entire company is strong, but we're particularly pleased with eBay Marketplaces, which delivered its strongest organic growth in gross merchandise volume, excluding vehicles, since 2006," Donahoe said in the company press release.

eBay bought back approximately $355 million worth of stock during the quarter, and the board of directors authorized an additional $2 billion buyback plan. The company ended the quarter with $7.6 billion in cash and cash equivalents, up from $7.5 billion at the end of 2011.

In addition to the earnings beat, eBay provided third-quarter and full-year guidance largely in line with analysts' forecasts. The company expects non-GAAP earnings for the third-quarter of 53 to 55 cents a share. Revenues are expected to be within a range of $3.3 billion to $3.4 billion. Analysts polled by Thomson Reuters are currently looking for a profit of 55 cents per share on $3.41 billion in revenue.

For the full year, eBay expects non-GAAP earnings of $2.30 to $2.35 with revenue ranging from $13.8 billion to $14.1 billion. Analysts are looking for $2.36 per share in earnings on $13.99 billion in revenue.

The company plans to hold a conference call at 5 p.m. EST to discuss the results.

Shares of eBay closed the regular session higher, gaining 3.6% to $40.46. Shares were reacting positively in after-hours, gaining another 4.2% to $42.14 according to

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-- Written by Chris Ciaccia in New York

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