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There's more to last night's earnings report from MercadoLibre (Nasdaq: MELI) than meets the eye. In fact, the more you rub your eyelids, the more distorted you realize your first glance was.

The first wave of news coverage about the report finds the major outlets in agreement:

• "MercadoLibre 1Q profit doubles, sales disappoint," writes the Associated Press.
• "InPlay: MercadoLibre beats by $0.02, misses on revs," goes Briefing.com.

A superficial skim of the numbers bears out their spin. Wall Street was expecting earnings to double to $0.10 a share, with revenue inching 14% higher to $32.9 million. Revenue rose by only 12% to $32.3 million.

However, in local currencies, the leading Latin American online marketplace is doing way better than the numbers suggest. Strength in its namesake marketplace and its PayPal-esque MercadoPago was quite stellar before the stronger dollar wiped out most of those top-line gains. In local currency terms, consolidated net revenue rose by a sharp 37%.

Operating profitability wasn't as disappointing as it appears, either. Baked into that number is a negative hit from the remeasurement of the company's dollar-denominated expenses in Venezuela.

On the other hand, the foreign exchange gains of the company's dollar-denominated assets beefed up net income, along with a dramatic plunge in its effective tax rate. The bottom line isn't the result of percolating margins in a highly scalable business model. Operating profits inched just 3% higher.

Put it all together, and you'll find that the top line is better than you think, while the bottom line is perhaps worse than you think.

Either way, this performance is still way better than what eBay (Nasdaq: EBAY) delivered during the same three months, when revenue and earnings took a dive.

eBay has an 18% stake in MercadoLibre, and you have to wonder whether it's hungry for more after agreeing to buy South Korea's Gmarket (Nasdaq: GMKT). Gobbling up more of MercadoLibre would make more sense than wolfing down stateside marketplaces such as Liquidity Services (Nasdaq: LQDT) or Bidz.com (Nasdaq: BIDZ), which have been languishing.

MercadoLibre shareholders are naturally hoping for the best for their company, whatever the future holds. Given the marketplace's potential in a geographical region that's still early in the Web migration cycle, the best is surely yet to come.

Other bids for your attention:

• Gmarket is also growing nicely relative to eBay.
• A lot of you want to give eBay a swift kick in the backside.
• Don't miss out on the biggest economic opportunity of the 21st century.