World News – US – PayPal profits bolstered by pandemic e-commerce boom, but fourth quarter profit outlook is insufficient


PayPal Holdings Inc continued to benefit from the booming adoption of e-commerce during the pandemic, but shares fell during extended trading on Monday after the earnings outlook for the holiday quarter of the society have been revealed

Company forecasts 17% to 18% growth in adjusted earnings per share in the fourth quarter, to rise to 97 cents to 98 cents Analysts expected $ 1.07 in adjusted earnings per share

CFO John Rainey said the company’s earnings outlook mirrors the timing of capital spending in the second half of 2020 The additional investment is more heavily weighted in the fourth quarter, â € “ he said when calling on PayPal results

PayPal beat expectations with its third quarter results, posting $ 1.07 in adjusted EPS, down from 76 cents a year before and before the FactSet consensus, which called for 94 cents The company reported GAAP net income of $ 1.02 billion, or 86 cents per share, compared to $ 462 million, or 39 cents per share, in the previous year quarter

The company has raised its EPS forecast for the full year as it forecasts adjusted EPS growth of 27% to 28% for 2020 This is from an earlier estimate of around 25 % growth

PayPal revenue for the third quarter climbed to $ 5.46 billion from $ 4.38 billion, as analysts modeled $ 5.42 billion The payment processing giant added 152 million new net active accounts in the third quarter, including 15 million merchants Net new assets total was PayPal’s second best quarterly result, behind only last quarter

â ???? It is clear that the world is accelerating towards a digital first economy, â € “ CEO Dan Schulman told MarketWatch The company’s revenue growth rate for the quarter was the highest on record, he said

Shares fell 55% in after-hours trading on the Monday immediately following the release results PayPal stock has gained 736% so far this year as the S&P 500 index
moved 12% higher

The company processed a total payment volume of $ 247 billion, the value of payments made through its platform Analysts expected $ 232 to 7 billion The total payment volume for the Venmo platform reached $ 44 billion and marked the service’s best quarter in terms of volume

– Third quarter revenue was slightly above consensus, as accelerating POS growth more than offset weaker-than-expected recovery rates, â ?? Baird analyst Colin Sebastian wrote – Notably, Venmo TPV accelerated significantly quarter over quarter, which likely contributed to the decline in total monetizationâ ????

PayPal continued to see volume momentum after quarter end, spokesperson said, as the company posted a new one-day-to-day volume record in October

The revenue report was released shortly after PayPal announced it would start allowing users to buy, sell and shop with cryptocurrencies through its platform.

Looking across the landscape, there are digital currencies like cryptocurrencies and new emerging currencies like central bank digital currencies, â € “ Schulman told MarketWatch on Monday They are all clearly complemented by digital wallets and we believe our collaboration with regulators can truly usher in a new era around all forms of digital ????

Schulman said PayPal plans to « dramatically expand its functionality » in PayPal and Venmo applications next year – to encompass a wide range of financial services and tools a ????

He said on PayPal’s earnings call that the company is now forecasting $ 900 million in revenue for Venmo in 2021 It also expects Venmo to make a positive contribution to transaction margin dollars next year, as the service’s transaction margins have improved due to a diversification of its revenue base.

PayPal increased its volume and profit guidance for the year The company now expects total payment volume in the 30% growth range, compared to an earlier high growth range of 20% In summary, PayPal projects adjusted EPS growth of 27% to 28% for 2020, up from its previous estimate of growth of around 25%.

The company forecasts 21% to 22% revenue growth on a currency neutral basis Three months ago, he told investors to expect 20% to 22% growth

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For the fourth quarter, PayPal estimates low to medium growth of 30% in total payment volume and 20% to 25% revenue growth The company said this improved outlook comes despite eBay Inccomme
transition to its own managed payment platform, which PayPal says is going faster than expected

Compared to a few months ago, we expect a larger impact on fourth quarter revenue growth from eBay’s payment intermediation, given the pace of merchant migration in the third quarter ?? Rainey said during the results call Longer term, a faster transition for merchants to eBay’s managed payments platform is better for us strategically, financially and operationallyat ????

Just two days before the 2020 election, Joe Biden appears to have a solid lead over the president, but races in key states remain tight

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World news – United States – PayPal profits bolstered by pandemic e-commerce boom, but outlook in fourth quarter profits decline short


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