EBay Inc. on Wednesday reported a second quarter drop in profit of 29 percent as demand for the company's auction business dropped.

Despite the reported loss the company still beat Wall Street expectations and its shares rose more than 3 percent.

For the quarter ended June 30, the company reported net income of $327.3 million, or 25 cents a share, compared to net income of $460.3 million, or 35 cents a share, for the same period last year.

The company attributed the fall to the strong dollar and the impact of the global economic downturn.