Ebay reported quarterly results that exceeded what Wall Street was expecting, and the company gave a rosy outlook for the current quarter as well.
EBay, which connects buyers and sellers over the Internet, has been overhauling its main marketplaces division to increase transactions on its site. Revenue rose 15 percent at that unit and 28 percent at PayPal, its fast-growing Web payments unit.
Gross merchandise volume, which measures the total value of goods sold on eBay, rose 24 percent in the quarter. That marked a huge improvement over the negative trends seen earlier in 2009.
"People are pleased to see things are actually pretty good and they are benefiting from the macro environment," said Benjamin Schachter, senior internet analyst with Broadpoint Amtech. "The core business is showing some rebound and PayPal is benefiting from e-commerce growth."
EBay reported earnings of 44 cents a share for the fourth quarter excluding one-time items, against a profit of 41 cents a share during the same period last year.
Sales reached $2.37 billion in the most recent quarter, up from $2.036 billion last year.
For the current quarter, eBay said it sees earnings 39 to 41 cents per share. Current consensus stands 39 cents.
On the revenue side, eBay sees sales reaching $2.1 billion to $2.2 billion. The Street expects 2.14 billion.
"Historically, they tend to guide pretty conservatively and I wouldn't be surprised if they are thinking they'll do better," said Morningstar Stock Analyst Larry Witt.
Analysts who follow eBay saw the company reporting a profit of 40 cents a share on a topline of $2.291 billion, according to an average estimate compiled by Thomson Reuters.
"I thought (eBay's results) looked pretty good, the best they have looked in at least a year. Auction volume has stopped falling, which is a good thing for them. PayPal is hitting the ball out of the park," Witt said.
Shares of eBay were up almost 8 percent in late trading Wednesday. Get after-hour quotes for eBay here.
The stock shed 4.43 percent during the regular Nasdaq session , finishing at $22.23.
EBay, which connects buyers and sellers over the Internet, has been overhauling its main marketplaces division to increase transactions on its site, and recently unloaded its Skype Web telephone unit, deemed a bad fit with the company.
Shares of eBay rose 69 percent in 2009, buoyed by early signs of a turnaround in its marketplaces division, where growth has slowed in recent years. But they are off a year high of $25.80 in late October on concerns that a still-weak economy would weigh on growth.