Ebay turned in a profit that topped analysts' expectations, and the company's shares jumped in late trading Wednesday as more people transferred money through its PayPal payment service and shopped on its main web site.
EBay said it earned 40 cents a share in the second quarter, on an adjusted basis, up from 37 cents a share last year.
Sales grew to $2.22 billion, against $2.16 billion last year.
According to an estimate compiled by Thomson Reuters, EBay was expected to turn in a profit of 38 cents a share on sales of $2.16 billion.
Most growth came from eBay's second-largest business, online payments, which includes PayPal and short-term credit service Bill Me Later. The unit's revenue rose 22 percent to $817 million.
EBay said PayPal would maintain its strong results through the year. At the same time, it warned that the negative effect of a stronger U.S. dollar would hurt full-year results and trimmed the high end of its 2010 forecast.
"Paypal is better than expected. It's a tremendous asset," said Colin Gillis, an analyst with BGC Partners. "They added in a million new accounts each month ... it has extended itself off of the platform. Their non e-Bay business is growing 40 percent year-over-year."
EBay said it now expects full-year revenue of $8.8 billion to $9.0 billion—a tad lower than an earlier forecast of up to $9.1 billion.
EBay shares hopped about 3 percent in late trading. Get after-hour Quotes for Ebay here.
The stock, which trades on the Nasdaq , finished Wednesday's session down almost 3 percent.
For the current, third quarter, eBay said it sees garnering a profit in the range of 35 cents to 37 cents a share. The consensus estimate stands at 39 cents a share.
Net profit in its second quarter rose to $412 million, or 31 cents per share, from $327 million, or 25 cents per share, a year earlier.
Fred Moran, an analyst with Benchmark, said eBay's results signal a recovery in e-commerce.
"The fact that eBay's top line has rebounded to a midteens revenue growth rate is representative of the recovery being seen in e-commerce, and clearly reflects well on Amazon showing powerful growth in its report [Thursday]," Moran said.
- Reuters and AP contributed to this report.