PayPal forecasts 2020 earnings below estimates, stocks fall

PayPal Holdings Inc (PYPL.O) predicted adjusted earnings for the whole year below analyst expectations, as it invests in technology to defend itself from competition in a crowded digital payment space, which makes its shares fall 4%.

To cope with the competition, PayPal has also been spending on smart acquisitions, such as the purchase of $ 4 billion from the Honey shopping and rewards platform last year, the largest in its history.

Total operating expenses increased almost 15% to $ 4.16 billion in the fourth quarter.

PayPal, based in San Jose, California, expects adjusted earnings for the entire year in the range of $ 3.39 per share and $ 3.46 per share, below analyst expectations of $ 3.49, according to Refinitiv IBES data.

Total payment volume (POS), the dollar value of processed transactions, increased approximately 21% to $ 199.40 billion, but was below analyst estimates of $ 202.7 billion.

The company’s net income fell to $ 507 million, or 43 cents per share, in the quarter ending December 31, from $ 584 million, or 49 cents per share, a year earlier.

Excluding unique items, the company earned 86 cents per share, beating analysts’ estimates of 83 cents.

Revenue increased 17.4% to $ 4.96 billion, above analysts’ expectations of $ 4.94 billion.

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