eBay earnings: PayPal carries the quarter; 2010 outlook lowered

eBay's second quarter earnings inched just above Wall Street's expectations with the company pointing to "record second quarter performance" by PayPal. (Statement)

For the quarter ending June 30, eBay reported net income of $530.2 million, or 40 cents per share, on revenue of $2.2 billion. Wall Street had been expecting earnings per share of 38 cents on sales of $2.17 billion.

The company said that PayPal added a million new accounts each month during the quarter and that its merchant services business grew by 40 percent from the year-ago quarter. On the marketplaces side, which includes the core eBay site, the company said simply that the "multiyear" turnaround of its eBay business remained on track but noted slower than expected growth in the U.S.

In statement, company President and CEO John Donahoe said:

PayPal is strong and getting stronger, building a robust and innovative global footprint serving all of ecommerce. And our eBay turnaround remains on track, with strong performance in Europe, significant changes in the U.S. and continued improvements to the buying and selling experience.

Looking ahead, the company, citing full year pressure from the stronger U.S. dollar, lowered its full year outlook to $8.8 billion to $9.0 billion in revenue and earnings per share of $1.60 to $1.65. In January, the company said - and reaffirmed in April - a full-year outlook of $8.8 billion to $9.1 billion with eps between $1.63 and $1.68.

For the third quarter, eBay estimates earnings to be 35 cents to 37 cents per share on revenue between $2.13 billion and $2.18 billion. Wall Street had been expecting third quarter earnings of 39 cents per share on revenue of $2.2 billion.

Shares of eBay were down about 3 percent to $20.17 in regular trading. The stock dipped initially when the earnings report was release but then rebounded, gaining more than 4 percent in after-hours trading.