PayPal shares rise on back of quarterly profit growth
2023.02.10 04:36
PayPal shares rise on back of quarterly profit growth
By Ray Johnson
Budrigannews.com – (NASDAQ:) PayPal Holdings Inc. said that CEO Dan Schulman intends to retire at the end of the year and beat expectations for earnings in the quarter.
After-hours trading saw a 2.3% increase in the payments fintech’s stock, which has gained 10% so far this year.
The board will hire a search firm to assist in the search for Schulman’s replacement, who joined the company in 2014 as it was being split from eBay (NASDAQ:). He said that he thinks PayPal will have “enough runway” to find a replacement if he stays in the job until 2023.
“I wanted to be sure that PayPal was moving in the right direction and could deliver a strong year of performance. Therefore, I can be certain that I did not leave the company in a difficult situation,” Schulman stated.
PayPal reported adjusted earnings of $1.24 per share and $7.38 billion in revenue. On $7.39B in revenue, analysts anticipated an adjusted profit of $1.20 per share—a 7 percent increase from the previous year.
Schulman described 2022 as a “transformative year” for PayPal, highlighting investments “in our platform to better serve our customers, while focusing and streamlining our business.” Total payment volume came in slightly below expectations for the fourth quarter, at around $357.4 billion, representing a 5% increase over forecasts for $360 billion.
PayPal reported that total payment volume increased by 9% to $1.36 trillion and revenue increased by 8% to $27.5B for the full year 2022. Estimates were consistent with both.
The company anticipates a 7.5% increase in net revenue and adjusted earnings per share of $1.08 to $1.10 for the first quarter of 2023, exceeding expectations for $1.07. Overachieving expectations, it anticipates a full-year adjusted EPS of around $4.87.
After the earnings report was released, Schulman gave investors a call and said that the first quarter was off to a better start than expected. He also said that the company is confident that online consumer spending will eventually recover in the long run as the recent rise in living costs goes down.
According to Schulman, “Still [it is] difficult to accurately assess how the year ahead will play out in terms of e-commerce growth.” Twenty experts will provide you with 20 distinct perspectives. Global e-commerce growth will be slightly positive year over year, as is our initial assumption, and discretionary spending will continue to be under pressure.”
