A hefty surge in international sales helped eBay Inc. (EBAY) post second-quarter earnings Wednesday that more than doubled, narrowly beating Wall Street's expectations.

For the three months ended March 31, the online auction giant earned $190.4 million, or 28 cents per share, compared with $91.9 million, or 14 cents per share in the same period of 2003. Excluding special items, eBay earned $197.7 million, or 29 cents per share, up from $103.1 million, or 16 cents per share, in the first quarter of 2003.

The San Jose, Calif.-based company reported second-quarter revenue of $773.4 million, up 52 percent from the same period last year.

Analysts were expecting eBay to earn $185.4 million, or 27 cents per share, on sales of $769.46 million.

The company — considered one of the most financially conservative in Silicon Valley — slightly boosted its outlook for the rest of the year. The company now expects 2004 sales as high as $3.185 billion, $35 million higher than it previously predicted.

EBay's transaction revenue in the United States last quarter was $319.1, up 32 percent from the same quarter of 2003. International transaction revenue in the same period surged 76 percent, to $273.7 million.

EBay executives said they based their optimistic outlook for the rest of the year on the strength of the company's PayPal (search) payment transaction division, and eBay's fledgling operations in China, India and other international markets.

But analysts expressed concern about eBay's near-term growth prospects abroad and worried that the stock may have peaked.

"We continue to believe that material contribution from China is more of a 2005 than a 2004 story," Mark Mahaney of boutique investment bank American Technology Research wrote in a report earlier this week.

Investors sent eBay shares tumbling. EBay stock fell $3.35, or more than 4 percent, to close at $76.60 in trading on the Nasdaq Stock Market, before the earnings were released. In after-hours trading, the shares slumped another 6 percent to $72.25.

"Do many of the markets we've entered recently have lower per capita income and lower Internet penetration? Yes, but that will increase," said chief financial officer Rajiv Dutta. "Our management philosophy is to build for the long term. What's a small portion of the business today may well be a very large percentage in the future."

But some say foreign operations are a double edged sword, exposing the company to currency swings worldwide and seasonality in Europe, where summer vacations bring e-commerce to a near halt.

Impatient investors were particularly concerned that limited Internet access will stymie eBay's potential China and India — two markets eBay has targeted for rapid expansion — for at least a year.

"We think India is more of a 2006 than a 2004 story for eBay, but we think the company is doing the right thing to track down these growth opportunities," Mahaney wrote.

Last month, eBay announced a $50 million acquisition of Indian auctioneer Baazee.com, India's most popular online shopping site. India has more than 1 billion people but only 4 million Internet connections. Although many Indians who do not own computers visit cyber cafes to browse the Internet, relatively few consumers have credit cards and many are distrustful of e-commerce transactions.

Investors also have been concerned about the growing operating expenses at eBay — once known as one of the leanest startups in Silicon Valley — for several quarters. On Wednesday, the company reported that "general and administrative" expenses — which includes payments to some accountants, lawyers, consultants and technologists — had swelled to $102.9 million, up from $69.5 million in the same period of 2003.

Dutta blamed the increase on expenses that any established company must assume.

"We've been focused not just on visible things, such as sales and marketing, but on internal infrastructure — accountants, lawyers, etc. It's legal expenses and consulting related to systems conversions."

Investment banks including Prudential and American Technology Research downgraded eBay last quarter, when it reached a 52-week high of $94.46. Based on concerns that it couldn't sustain lofty valuations, JP Morgan, Caris & Co. and Friedman Billings initiated coverage with lackluster rankings such as "market perform" or "average."