PayPal quarterly profit beats estimates; forecast falls short
PAYPAL Holdings Inc on Wednesday reported a secondquarter profit that beat analysts’ estimates, but its forecast for third- quarter revenue came up short.
Net income rose to US$ 526 million, or 44 cents per share, in the second quarter, from US$ 411 million, or 34 cents per share, a year earlier. Revenue rose to US$ 3.86 billion from US$ 3.13 billion.
Excluding one-time items, the company earned 58 cents per share, beating the average analyst estimate of 57 cents, according to Thomson Reuters.
For the third quarter, PayPal said it expects revenue between US$ 3.62 billion and US$ 3.67 billion, below analysts’ US$ 3.71 billion estimate.
Since separating from online marketplace eBay Inc in 2015, San Jose, California-based PayPal has been striving to become more than just a checkout button on e- commerce platforms.
It has been expanding the breadth of its services through an aggressive strategy of partnerships and acquisitions, as it looks to stay ahead of rivals in the increasingly competitive digital payments landscape.
“PayPal is committed to being a comprehensive digital payments platform, offering complete solutions to our customers as the world rapidly digitizes across both retail and financial services,” PayPal Chief Executive Dan Schulman said on a call with analysts.
In May it said it had agreed to acquire Swedish payments company iZettle for $ 2.2 billion, in its largest ever acquisition.
The following month it agreed to acquire prediction platform Jetlore, fraud prevention startup Simility and HyperWallet Systems Inc, a company that helps online individual and small business sellers accept payments.
Earlier this week, PayPal won the support of Third Point LLC, Daniel Loeb’s activist hedge fund, which revealed in an investor letter that it had taken a stake in the online payments company.
“We see parallels between PayPal and other best-in- class internet platforms like Netflix and Amazon: high and rising market share, untapped pricing power, and significant margin expansion potential,” Third Point’s letter said.
PayPal processed US$139 billion in payments in the second quarter of 2018, up 29 per cent from a year earlier.
Venmo, its peer-to-peer payment app popular with younger consumers, processed US$ 14 billion in payments in the second quarter, up 78 per cent from the same period last year.
PayPal also said its board had approved US$ 10 billion in share buybacks.
The company raised its revenue forecast for the full year to US$ 15.3 billion to US$ 15.5 billion from US$ 15.2 billion to US$ 15.4 billion. — Reuters