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Ebay Rocks And Investors Roll: Here's Why

I can sum up eBay's third quarter earnings numbers in three little letters: w-o-w! The company reports 41 cents a share versus the 33 cents the Street was expecting. True, the 41 cents includes 4 cents in one-time tax benefits, but even without that, the company still beats by 4 pennies. EBay says the apples to apples though includes that tax benefit so 41 cents is the true comparison.

That great bottom-line news comes without huge growth on the topline, which means eBay is coming up with new ways to generate more profit, and that's a big deal.

But dig a little deeper into the spreadsheet and the good news really shines through. This is a remarkably bullish report. Gross Merchandise Volume, a real weak point last quarter when the company reported its slowest growth in this key metric in its history, grew 14%, hitting $14.4 billion. That compares to the 12% growth the company saw last quarter, so acceleration here is absolutely key in showing some sense of recovery.

PayPal was also another strong performer, showing its best results ever. PayPal's $470 million in revenue was a record, growing 35%, compared to the 31% growth the company saw last quarter. This is a major deal for eBay.

Guidance was also unusually strong. eBay now anticipating $2.1 billion to $2.15 billion, compared to the $2.038 billion analysts were expecting in the fourth quarter. The anticipated EPS range of 36 cents to 38 cents has now been replaced by eBay's expectation of 39 cents to 41 cents. This again is extremely bullish.

As I wrote earlier,eBay's business won't fall off a cliff. But a slowdown at the company is expected by many on the Street. It's just that with a report like this one, and guidance like that, any slowdown appears a little further down the road than maybe the bears on this stock were hoping for.

EBay is celebrating big-time tonight; meaning investors could be celebrating big-time tomorrow.

Questions? Comments? TechCheck@cnbc.com

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