PayPal Warns On Q4 Earnings, Adjusts FY24 Outlook; Stock Down In Pre-market - Update

(RTTNews) - PayPal Holdings, Inc. (PYPL), while reporting higher earnings per share and revenues in its third quarter, on Tuesday warned on weak earnings in its fourth quarter, and adjusted guidance for fiscal 2024.

In pre-market activity on the Nasdaq, PayPal shares were losing around 5 percent to trade at $79.45.

Outlook

Looking ahead to the fourth quarter, the company now projects earnings of $1.03 to $1.07 per share, lower than last year's $1.29 per share.

Adjusted earnings per share are now expected to decrease in low to mid-single-digit from last year's $1.14.

The company previously expected reported earnings around $1.05 per share, and adjusted earnings to decrease in mid-single digit.

Analysts on average expect the company to report earnings of $1.10 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

For the quarter, revenue is expected to grow in low single-digit from prior year's $8.03 billion, reflecting impact of price-to-value strategy and prioritization of profitable growth.

Further, for fscal 2024, PayPal now projects earnings in a range of $3.92 to $3.96 per share, higher than last year's $3.84 per share, and adjusted earnings growth in the high teens from prior year's $3.83 per share.

Previously, the company expected earnings in a range of $3.88 to $3.98 per share and adjusted earnings growth in the low to mid-teens

The Street is looking for earnings of $4.46 per share for the year.

Q3 Results

In its third quarter, PayPal reported net profit at $1.01 billion, down 1 percent from last year's $1.02 billion, while earnings per share grew 6 percent to $0.99 from $0.93 a year ago.

Adjusted earnings were $1.228 billion or $1.20 per share for the period, compared to $1.077 billion or $0.98 per share a year earlier.

The company's revenue for the quarter rose 5.8 percent to $7.847 billion from $7.418 billion last year.

The analysts were looking for earnings of $1.07 per share on revenues of $7.89 billion for the quarter.

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