Categories Earnings, Finance

PayPal’s stock tumbles despite earnings beat

PayPal (PYPL) which has been on an acquisition hunt in the last two months reported its second-quarter results after the closing bell. Thanks to improved payment volumes, revenue increased 23% over last year while profits jumped 28% to $0.58 per share, both beating analyst estimates. The company raised its full-year outlook which hasn’t impressed investors with the stock price decreasing nearly 4% in the extended hours of trading.

Board approved a new $10 billion stock buyback program, which will resume after the current $5 billion program is completed.

PayPal Holdings second quarter 2018 earnings

Total payments volume (TPV), a key metric tracked by analysts, shot up 29% to $139 billion. PayPal added 7.7 million active accounts with 18% jump in net new accounts. However, this is less compared to 8.1 million accounts added in the last quarter.

Related: PayPal agrees to buy iZettle for $2.2 billion

Payment transactions done on the platform improved 28% compared to last year. The company processed 35.7 transactions per active account on a TTM basis, improving 9% due to improved engagement from its users.

Venmo continues its impressive performance with volumes jumping 50% to $33 billion. PayPal’s monetization efforts seem to be paying off with the social payments platform processing more than $46 billion over the last 12 months. In the second quarter, the platform processed $14 billion, up 78% over last year.

In order to augment its digital offerings and compete with its rivals, PayPal has been on a buying spree; it has acquired four companies in the last two months spending more than $2.7 billion. In May, it gobbled up European based iZettle for $2.2 billion, which is the biggest deal done by the firm till date. The shopping list also includes Hyperwallet, which was acquired in June for $400 million, and two other firms Jetlore and Simility.

Related: PayPal to acquire Hyperwallet

Recently CEO Dan Schulman stated that company would be spending $3 billion annually for M&A. It would be interesting to see in the impending quarters how these deals are going to boost the bottom line. PayPal’s stock has been on a roll increasing by about 57% in the last 12 months and above 24% in 2018.

For full-year 2018, PayPal raised its revenue outlook which is expected to come in between $15.30 billion and $15.50 billion and adjusted earnings revised upwards in the range of $2.32 to $2.35 per share.

Third quarter revenue outlook failed to impress the street, as it fell short of their forecasts. Based on current spot prices, the company expects to record 12% to 13% growth in sales with non-GAAP earnings to come in between $0.53 and $0.55 per share for the current quarter.

Related: Mobile payments boost PayPal profit for Q1

Most Popular

AVGO Earnings: All you need to know about Broadcom Q1 2021 earnings results

Broadcom Limited (NASDAQ: AVGO) reported first quarter 2021 earnings results today. Total revenue increased 14% year-over-year to $6.65 billion. GAAP net income was $1.3 billion, or $3.05 per share, compared

Infographic: Costco (COST) Q2 2021 sales up 15%; earnings miss

Retail giant Costco Wholesale Corporation (NASDAQ: COST) reported higher earnings and revenues for the second quarter of 2021. Earnings missed analysts’ expectations, while sales beat. Net profit was $951 million

Will shifting to as-a-service model help Hewlett Packard in emerging stronger from COVID?

With the corporate world rapidly shifting to cloud-native computing after the virus outbreak changed work culture and the way businesses operate, technology providers are aggressively innovating their offerings. Hewlett Packard

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top