PayPal Surpasses Profit Expectations As COVID-19 Drives Strong Growth in Ecommerce

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Actions de PayPal Holdings Inc. PYPL,
+ 4,72%
rose more than 3% on Wednesday after the digital payments company beat profit and revenue forecasts amid booming growth in online transactions. (For more on the company’s earnings, see MarketWatch’s interview with CEO Dan Schulman.) PayPal posted net income of $ 1.53 billion, or $ 1.29 per share, from 823 million dollars, or 69 cents per share, in the prior quarter. PayPal’s adjusted earnings per share rose to $ 1.07 per share from 71 cents a year earlier, while analysts polled by FactSet modeled 87 cents. This includes a negative impact of 7 cents from the credit loss reserves. Revenue for the quarter climbed to $ 5.26 billion from $ 4.31 billion. The FactSet consensus called for $ 4.99 billion. PayPal’s total payment volume, or the value of transactions passing through the PayPal platform, rose from $ 172 billion to $ 222 billion, as analysts looked for $ 210 billion. The company also recorded around $ 37 billion in Venmo payment volume. Overall, PayPal added 21.3 million new net asset accounts during the period. The company revealed that it had more than 60 million active Venmo accounts in the second quarter, which it defines as accounts that completed a transaction within 12 months. For the third quarter, PayPal expects 30% growth in total payment volume, 25% revenue growth on a currency neutral basis and 25% growth in adjusted earnings per share. The company also restored a forecast for 2020 after withdrawing the previous one earlier in the year due to uncertainties over the pandemic. For the full year, the company expects strong growth of 20% in total payment volume, 22% growth in currency neutral revenue, and growth of around 25% in adjusted EPS. PayPal shares have gained 49% in the past three months, the S&P 500 SPX,
+ 1,24%
increased by 11%.

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