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.