PayPal Shares Slip Despite Profit Beat and Raised Annual Forecast

what happened

PayPal Holdings reported third-quarter non-GAAP earnings per share of $1.45, ahead of the $1.31 analyst consensus. Revenue, however, came in at $8.58 billion, below the $8.72 billion expected. According to GuruFocus, the stock dropped 1.42% in premarket trading.

Revenue grew 2%, with U.S. sales up 5% while international sales fell 2%. Transaction margin dollars rose 2% to $3.95 billion. Total payment volume increased 6% to $487.1 billion, and active accounts reached 440 million. GAAP EPS fell 4% to $1.25 because of higher restructuring charges. During the quarter the company bought back about 28 million shares for $1.5 billion and raised its full-year non-GAAP EPS guidance to roughly $5.60 from about $5.38. It expects fourth-quarter non-GAAP EPS of around $1.43. CEO Enrique Lores said: "We are beginning to see our strategy translate into our financial results."

why it matters

Investors weighed a stronger profit line and higher guidance against softer revenue. The reduced share count from buybacks also supports per-share figures, but the revenue shortfall remains the main question for the market.

market impact

PayPal shares: profit beat and higher guidance support the stock, weaker revenue weighs

• ↔PayPal shares mixed — profit beat and raised guidance against the revenue miss

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