PayPal Earnings Pop 27% Under New Reporting Method. PayPal Stock Is Set To Break Out.
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REINHARDT KRAUSE08:05 AM ET 04/30/2024
PayPal Holdings (PYPL) early Tuesday reported first-quarter earnings that rose 27% from a year earlier under a new accounting methodology while revenue and total payment volume for PayPal stock topped views. PYPL stock rose on the news, signaling a move past a buy point.
The digital payments firm reported earnings before the market open, not after the close as usual.
The new accounting includes the impact of stock-based compensation expense and related employer payroll taxes. PayPal said it has recast adjusted financial results for 2023, 2022 and 2021 to reflect the accounting change.
PayPal earnings for the March quarter rose 27% to $1.08 per share on an adjusted basis. Revenue climbed 9% to $7.7 billion.
Analysts polled by FactSet expected PayPal earnings of $1.22 a share on revenue of $7.515 billion. A year earlier, PayPal earned $1.17 a share on sales of $7.04 billion.
Payment Volume Beats
Total payment volume processed from merchant customers in the quarter climbed 14% to $403.9 billion. Analysts had projected total payment volume of $393.64 billion.
New CEO Alex Chriss took the helm in late September. Also, PayPal has named a new chief financial officer: Jamie Miller, formerly CFO at consultancy EY.
San Jose, Calif.-based PayPal has evolved from an online checkout site to a mobile shopping and person-to-person payments site. Meanwhile, competition has heated up with Apple (AAPL), Square-parent Block (SQ) and others.
PayPal Stock 2024 Guidance
On the stock market today, PayPal stock popped 8.2% to 72.50 in early trading. That's set to clear a 68.21 buy point from a consolidation going back three months.
PayPal also updated 2024 guidance. The company forecast adjusted EPS growth of "mid to high single-digit percentage" from $3.83 in the prior year based on the new reporting method. The 2024 guidance includes Q1 restructuring charges of $175 million and an estimated $70 million to $90 million in Q2.
Heading into the PayPal earnings report, shares were up 9% in 2024 but down 12% over the past year.
SQ stock rose slightly, nearing its 50-day line. Square-parent Block is set to report on Thursday.
PayPal said it announced plans to change accounting methods on Feb. 7
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