PayPal holdings (PYPL) Thursday reported fourth-quarter earnings and revenue that topped views while total payment volume lacked. PayPal shares fell as the company’s outlook exceeded expectations following the announcement that Chief Executive Officer Dan Schulman will retire effective Dec. 31, 2023.
For the quarter ended December 31, 2022, however, PayPal’s earnings increased 12% year-over-year to $1.24. The e-commerce firm said revenue rose 7% to $7.4 billion, topping analyst estimates.
Analysts had expected PayPal earnings of $1.20 per share on revenue of $7.39 billion. A year earlier, PayPal was earning $1.11 per share on $6.92 billion in revenue.
The total volume of payments processed by commercial customers rose 5% to $357.4 billion. Analysts had forecast a total payment volume of $360.38 billion.
Meanwhile, Schulman will continue to serve on PayPal’s board after stepping down as CEO.
PayPal actions: 2023 guidelines
For full year 2023, PayPal expects earnings per share of $4.87 at the midpoint of the forecast, an increase of approximately 18%. PayPal has not provided a revenue outlook for 2023.
“Surprisingly, no revenue outlook was provided (2023),” Jefferies analyst Trevor Williams said in a note to clients.
Analysts had forecast full-year earnings of $4.79 on revenue of $29.89 billion. For the full year 2023, analysts estimate total payments volume growth of 9.5% to $1.49 trillion.
PayPal shares fell 2.8% to 76.20 in extended trading in today’s stock market.
PayPal, headquartered in San Jose, California, has evolved from online payment to mobile shopping and person-to-person payments. The competition has heated up with Square-parent To block (SQ) and others.
Repurchase of shares
After tumbling 62% last year, PayPal stock is up 12% so far in 2023, entering the earnings report.
Meanwhile, the company announced a $15 billion share buyback program in August. About $4 billion was expected to be used in 2022.
Additionally, PayPal in January announced plans to cut 2,000 jobs, or about 7% of its workforce.
PayPal shares have retreated from an all-time high of 310.16 on July 26, 2021. The shares hold a relative strength score of just 23 out of a possible high of 99, according to IBD Stock Checkup
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity, and cloud computing.
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