PayPal reports third-quarter earnings beat, volume miss

PayPal reports third-quarter earnings beat, volume miss

PayPal Holdings Inc. PYPL, -3.26% shares were up 1.7% in after-hours trading Thursday after the company beat third-quarter earnings and revenue expectations but fell short of estimates for total payment volume. PayPal reported net income of $436 million, or 36 cents a share, up from $380 million, or 31 cents a share, a year earlier. The company posted adjusted earnings per share of 58 cents, up from 46 cents a year ago and ahead of the FactSet consensus expectation for 54 cents. PayPal has met or exceeded FactSet earnings expectations in every quarter that it’s been a standalone company. Revenue for the third quarter climbed to $3.68 billion from $3.24 billion. Analysts had been expecting $3.66 billion. Total payment volume rose to $143 billion, up from $114 billion a year earlier. The FactSet consensus called for $145 billion in TPV. PayPal said that eBay Inc. EBAY, -1.47% marketplace volume grew 3% and represented 11% of overall TPV, while overall merchant-services volume increased 28%. The company said that this was a record quarter for new-customer acquisition, as it added 9.1 million active accounts, bringing its total up to 254 million. Active accountholders are completing 36.5 payment transactions per year on average, according to PayPal. Peer-to-peer volume rose to $36 billion and included $17 billion in contributions from Venmo. PayPal expects adjusted EPS of 65 cents to 67 cents for the current quarter as well as revenue of $4.195 billion to $4.275 billion. The company increased the lower bound of its full-year outlook while keeping the upper bound the same. It now expects revenue of $15.42 billion to $15.5 billion for 2018, including a 3.5 percentage-point impact from the sale of its credit-receivables portfolio to Synchrony SYF, -1.43% PayPal projects $2.36 to $2.40 in adjusted EPS. The shares have gained 16% over the past 12 months, while the S&P 500 SPX, -1.44% has climbed 10%.

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