eBay's Profit Slips but Beats Estimates - TheStreet

Online auction site

eBay

(EBAY) - Get Report

beat analysts' sales and profit estimates in its second-quarter

results

, despite slumping sales from its core Marketplaces business.

Revenue from Marketplaces, which includes eBay, Shopping.com, StubHub, Kijiji and a number of other e-commerce sites, plunged 14% compared to the prior year's quarter. eBay blamed this on the stronger dollar and challenging macroeconomic conditions, similar to the 18% decline the division experienced in the prior quarter.

The company's shares nonetheless rose in extended trading, climbing 58 cents, or 2.98%, to $20.03, likely boosted by eBay's revenue and earnings beat.

eBay's overall sales came in at $2.1 billion, a $97.7 million decrease on the prior year's quarter, but just above analysts' estimate of $1.99 billion. Year-over-year revenue growth in the firm's PayPal and Skype businesses, however, was offset by the Marketplaces division and the effects of the strengthening dollar.

The San Jose, Calif.-based firm earned 25 cents a share on net income of $327.3 million, down from 35 cents a share and $460 million in the prior year's quarter. On a non-GAAP basis, eBay earned 37 cents a share on net income of $479 million, down from 43 cents a share and $568 million in the same period last year. Analysts surveyed by Thomson Reuters had forecast earnings of 36 cents a share.

"We drove solid second-quarter results, with strong momentum and market share gains at PayPal and continued stabilization in our core eBay business," said eBay CEO John Donahoe in a statement released Wednesday after market close. "I'm pleased with our pace, our progress and our performance."

The buzz that once surrounded eBay may have

faded

in recent months, although

Google's

(GOOG) - Get Report

recent

results

and

Yahoo!'s

(YHOO)

solid

Q2 numbers have raised expectations about Internet spending.

eBay's rival

Amazon

(AMZN) - Get Report

will

report

its own second-quarter results later this week, adding more color to online consumer spending patterns.

For the third quarter, eBay expects revenue between $2.05 billion and $2.15 billion, slightly above analysts' estimate of $2 billion. On a non-GAAP basis, the firm predicts earnings between 34 cents a share and 36 cents a share, in line with analysts' estimate of 35 cents a share.