Paypal Revenue Climbs on Growing Active Accounts
October 20 2016 - 5:40PM
Dow Jones News
PayPal Holdings Inc. said Thursday that revenue jumped 18% in
the September quarter, boosted by a higher number of active
customer accounts.
The increase comes as the payment-services company has expanded
its partnerships with credit-card companies.
During the September quarter, the number of active customer
accounts rose 11% to 192 million, while the number of transactions
processed hit 1.5 billion, representing a 24% climb. The company
said it handled some $87 billion in total payment volume, up 25%
from the same period last month.
Shares of the company rose 3.5% to $41.50.
PayPal in recent months has signed deals with big card issuers
Visa Inc. and MasterCard Inc. in an effort to become a universally
accepted method of payment—part of the online-payment pioneer's
strategy after splitting off from eBay Inc. last year. The aim of
the partnerships is to end fights with the big card issuers.
"The opportunities for PayPal to grow and gain share have never
been greater," said Dan Schulman, CEO of PayPal, in a prepared
statement.
But some analysts have argued that this comes at the expense of
profitability in the short term. The moves shift PayPal away from
promoting free bank transfers to fund customers' transactions and
toward the networks, which charge a fee.
For the third quarter, PayPal posted income of $323 million, or
27 cents a share, compared with $301 million, or 25 cents a share,
a year earlier. Excluding certain items, the company's per-share
earnings rose to 35 cents from 31 cents.
Revenue rose 18% to $2.67 billion.
PayPal had said it expected adjusted earnings between 33 cents
and 35 cents, compared with analysts' expectations of 35 cents.
Analysts expected revenue of $2.65 billion, according to Thomson
Reuters.
For the current fourth quarter, the company forecast revenue
between $2.92 billion and $2.99 billion with adjusted per-share
earnings in the range of 40 cents and 42 cents. Analysts, on
average, had expected earnings of 42 cents a share on revenue of
$2.97 billion.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
October 20, 2016 17:25 ET (21:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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