EBay Inc. (EBAY), the world's largest online auction site, Wednesday posted a 40 percent rise in quarterly net profit and raised its outlook, but shares fell as investors were looking for more.

The results, excluding one-time items, were within the range of Wall Street expectations, as growth was fueled by its U.S. and German auction business and expansion of its online payment business. EBay raised its outlook for the rest of 2005 and 2006, but also within investor expectations.

EBay shares fell $2.52, or 6 percent, in after-hours trade to $39.49 from the regular-session Nasdaq close of $42.01, erasing a nearly 4 percent gain on Nasdaq ahead of the report.

"It looks like an in-line quarter with no real upside," said analyst Martin Pyykkonen of Hoefer & Arnett. "The fourth-quarter numbers they are guiding up a little bit, but the Street was already up there," he said.

Net income for the company rose to $255.0 million, or 18 cents per diluted share, compared with the year-earlier quarter's $182.3 million, or 13 cents per diluted share. Revenue rose 37 percent to $1.11 billion.

Excluding one-time items, eBay posted earnings of $280.2 million, or 20 cents a share.

Both the latest quarter's net and pro forma profit include a charge of $16.6 million, or 1 cent per share, to cover taxes for a new rule on intercompany stock option expenses. Without that charge, it had a 21 cent a share profit.

On that basis, Wall Street had predicted a profit, on average, of 20 cents per share, according to Reuters Estimates data. Forecasts ranged between 19 cents and 21 cents a share.

"This was a particularly strong quarter for eBay across all parts of its business," eBay Chief Financial Officer Rajiv Dutta told Reuters in a phone interview.

Wall Street was looking for third-quarter net revenue, on average, of $1.08 billion, according to Reuters Estimates data.

Looking ahead, eBay forecast fourth-quarter net revenue in a range from $1.25 billion to $1.29 billion, which includes $55 million of revenue from recent acquisitions Shopping.com (search) and Skype (search). It introduced a 2006 projection of $5.7 billion to $5.9 billion, including $200 million of revenue from Skype.

"As we head into the close of the year, I couldn't be more pleased with the overall health of the business," said Dutta, who is stepping down as CFO to become president of Skype, which eBay acquired last week for around $4 billion.

Separately, eBay said in a filing that Lynn Reedy, its chief of product development, would resign, effective Oct. 31, but remain employed in a transitional role until next May.

The San Jose, Calif.-based company, whose auction business was created only a decade ago, carries a valuation of 38.6 times 2006 consensus earnings forecasts, in line with the stock multiples of other leading Internet names such as Google (GOOG) and Yahoo (YHOO).

The stock fell sharply in mid-January from nearly $54 as investors grew concerned about a steady slowdown over the prior year in its core U.S. auction business. Annual growth in the first quarter of 2005 hit bottom at 19 percent, but has recovered solidly over the past two quarters.

Third-quarter U.S. marketplace net revenue grew 29 percent from a year earlier to $449.5 million. International marketplace net revenue grew 43 percent to $408.9 million.

Germany is the largest auction market outside eBay's home market. Together, the United States and Germany are responsible for roughly three-quarters of the company's auction revenues.

Quarterly revenue from its PayPal (search) online payments business totaled $247.1 million, growing 44 percent on the year.

Despite the reacceleration, investor fear over the maturation of eBay's U.S. and German businesses still lingers.

Registered users at the end of the third quarter totaled 168.1 million, a 35 percent increase from a year ago.

"I see nothing wrong with this report from eBay," said Jim Fisher, portfolio manager at Univest Wealth Management & Trust in Souderton, Pennsylvania.

"I think the stock is falling due to the combination of expectations that are way too high and the fact that the CFO is going to Skype," he said, adding: "That might be creating some uncertainty."