EBay has more than doubled its second-quarter net income thanks to higher revenue from its PayPal online payments business and its e-commerce websites.
The solid results, which came against the backdrop of the ongoing European economic turmoil, prompted investors to send the company's stock up nearly 6% in after-hours trading.
The growing use of smartphones and tablet computers to shop helped eBay sweep aside the economic woes affecting brick-and-mortar retailers. More people are using their smartphones and tablet computers to shop, which means they are more likely to shop on eBay, experts said.
While eBay's PayPal business has been going strong for several quarters, a real surprise was its marketplaces business, which consists mainly of its namesake e-commerce site. Though the company was not expecting a decline, many investors had braced for a deceleration of growth, in large part because of Europe. But chief executive John Donahoe said the marketplaces business saw its strongest growth since 2006.
Marketplaces' gross merchandise volume, an important metric that measures all items sold on eBay excluding vehicles, rose 10% to 16 billion dollars (£10.2 billion).
In all, eBay earned 692 million dollars (£443 million), or 53 cents a share, in the April-June period. That is up from 283 million dollars, or 22 cents a share, in the same period a year earlier.
Adjusted earnings were 730 million dollars (£468 million), or 56 cents a share, in the latest quarter - a penny above analysts' expectations. Revenue grew 23% to 3.4 billion dollars (£2.1 billion) from 2.76 billion (£1.7 billion). Analysts, on average, were expecting revenue of 3.36 billion dollars, according to FactSet.
The San Jose, California-based company makes most of its money by charging merchants a fee to list items posted for sale. It also generates revenue from PayPal transaction fees.
Besides its namesake online marketplace, eBay also owns StubHub, the ticket-selling website, Shopping.com and GSI Commerce, a provider of e-commerce and online marketing services.
The company is expanding PayPal beyond the internet, offering payment services to bricks-and-mortar stores and to mobile devices. Earlier this year, the company unveiled a mobile payments service for merchants called PayPal Here. It lets customers pay using credit cards, PayPal accounts or, in the US, personal cheques using merchants' mobile phones.