PayPal Earnings Rise; Revenue Growth Slight Disappointment

(RTTNews) - PayPal Holdings (PYPL) revealed a third-quarter profit that rose from last year and beat the expectation of market analysts. However, the firm's revenue growth was more sluggish than some Wall Street experts were predicting.

The company reported net income of $301 million, or $0.25 per share. This was up from $234 million, or $0.19 per share, in the same period last year.

PayPal's adjusted profit, which strips out the impact of one-time items, advanced 31 percent to $377 million, or $0.31 per share. In the third quarter last year, the company earned $288 million, or $0.24 per share.

Analysts had expected the company to earn $0.29 per share, according to a survey conducted by Thomson Reuters.

Revenue for the period advanced 15 percent, climbing to $2.26 billion compared to $1.97 billion last year. Analysts were looking for revenue of $2.27 billion.

An improvement in operating margin helped to offset a sales growth figure that was not as strong as many on Wall Street had projected. The company said its non-GAAP operating margin increased to 19.9 percent for the quarter. This compared to 17.9 percent in the same period last year.

Looking ahead, the company projected revenue growth of 15 percent to 18 percent for fiscal 2015, assuming a neutral currency exchange environment. Earnings for the year are projected to be between $1.23 to $1.27 per share, excluding one-time items.

Analysts are looking for $1.25 per share for the whole of 2015, with revenue of $9.23 billion.

Speaking to the company's general prospects, President and CEO Dan Schulman said that PayPal is well positioned to take advantage of the transition taking place in the financial services sector. He said the rising use of mobile technology in financial transactions will help the company, as will the accelerating process of "money becoming digital."

"These two massive trends play directly to our strengths and we are leveraging this transformation to extend and accelerate our lead," Schulman said.