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PayPal beat The Street when it reported fourth-quarter earnings after the bell on Wednesday. The global payments giant surpassed analyst expectations for both sales and profit.
PayPal reported $3.71 billion in revenue on a foreign-exchange neutral basis, or 24% growth from the same period last year. Analysts were expecting $3.63 billion in revenue for the quarter.
Adjusted earnings per share were 55 cents, compared to the 52 cents that Wall Street forecast.
But shares later ticked down as much as 14% in after-hours trading, likely due to a guidance forecast that just missed the mark. PayPal is expecting its overall revenue for the year to be between $15 billion and $15.25 billion. The midpoint was beneath what analysts surveyed by Yahoo Finance had been forecasting, with $15.16 billion. Other estimates had been as high as $15.26 billion.
PayPal said its adjusted earnings per share was expected to fall between $2.24 and $2.30. Yahoo Finance analysts had been expecting $2.25.
The company also announced an agreement with Synchrony Financial. Synchrony is acquiring PayPal’s consumer credit receivable portfolio, worth $6.4 billion. The transaction is expected to close in the third quarter of the year.
The company processed $131 billion in total payments volume for the fourth quarter, showcasing 32% growth.
PayPal has grown to 227 million active customer accounts, after adding 8.7 million for the quarter.
PayPal separated from eBay in 2015 and is currently the larger of the two companies, with a market cap of $103 billion. eBay is valued at $42 billion.
The two companies agreed to extend their partnership through July 2023, making PayPal the default payment option for eBay.
PayPal is also the owner of Venmo, the popular peer-to-peer payments platform. The app processed $10.4 billion in payments in just the fourth quarter alone.
Venmo’s overall growth for the year was 97%, processing $35 billion in payments in 2017.
That's one hell of beat down (- 8%), after renewing with EBAY through 2023 and having 24% revenue growth this quarter. I'm still holding, despite the likely drawdown of the ebay relationship around 2020. Paypal needs to get into crypto - now that would surely double it overnight. :)
They might get a short term pop, but it probably would not last. The company is just too big, although I suspect that they will be accepting cryptos at some point. Yesterday, Square announced that its Cash App customers could now "instantly" buy and sell bitcoin. The stock closed up 3% for the day. It is down 3% this morning.
I closed my position in PYPL today @77.47. I originally bought EBAY in 2013, and got the Paypal for free when they spun it off. Cost basis can be difficult to figure when this happens, but I calculate it as 38.70. Was bought in my 401K brokerage account, so I do not believe I have any need to track cost basis, but it is good to know.
PayPal is buying payments start-up iZettle for $2.2 billion ahead of IPO cnbc.com Zettle provides mobile card readers and other digital payment products to small businesses. A merger would catapult PayPal into hundreds of thousands of brick-and-mortar storefronts globally in an effort to bring its digital payments tool into physical retailers and compete with companies, like Square.
PayPal Significantly Enhances Global Payout Capabilities With Acquisition of Hyperwallet businesswire.com Hyperwallet’s global payout platform provides growing organizations with a fast, efficient, and transparent way to distribute funds to payees almost anywhere in the world. Trusted by enterprise, ecommerce, and on-demand platforms, Hyperwallet makes it easy to deliver a superior payment experience through a single integration. Put your payees in control with a range of convenient payment methods, enhanced financial management tools, integrated payment tracking, and user-friendly compliance and identity verification. Hyperwallet has offices in San Francisco, Austin, London, Sydney, and Vancouver.