(Corrects headline typographical error to PayPal instead of
By Anna Irrera and Sruthi Shankar
April 26 PayPal Holdings Inc raised its
earnings outlook on Wednesday after reporting
higher-than-expected quarterly profit resulting from an increase
in payment processing volumes and user growth.
The company raised its full-year profit forecast to
$1.28-$1.33 per share from $1.26-$1.31, and said its board
authorized a $5 billion share buyback program.
Revenue rose 17 percent to $2.98 billion, beating analysts'
average estimate of $2.94 billion.
Chief Financial Officer John Rainey said the company was
planning some staff cuts and other restructuring initiatives
which will slash $75 million in annual costs.
"Less than 3 percent of our global workforce will be
affected and based on current plans, we do not expect a net
decrease in headcount for the year," Rainey said.
PayPal's shares jumped 6 percent to $47.08 in after-hours
Chief Executive Dan Schulman said the company had added 6
million new active accounts in the first quarter, the largest
quarterly user increase in the past 3 years.
"We're changing the way we're operating as a company,"
Schulman said. "We're beginning to see the results of what we're
capable of here."
The San Jose, California-based company has been expanding
partnerships and acquiring new services to gain advantage over
rivals in a highly competitive digital payments market.
Last week it struck a deal with Alphabet Inc's Google
in a move to bring its payment wallet to
Consumers will be able to use their PayPal accounts with
Google's mobile payments platform Android Pay at retailers such
as WalGreens Boots and Dunkin' Donuts.
PayPal, which spun off from e-commerce firm eBay Inc
in 2015, also agreed to buy Canadian bill payment
processor TIO Networks Corp for about $233 million in
Rainey said growth in revenue had been driven by an increase
in payments processing volumes in both its core business and
other services such payments platform provider BrainTree.
PayPal's total payments volume jumped 22.5 percent to $99.33
billion, beating research firm FactSet StreetAccount's estimate
of $99.20 billion.
Mobile payments volume rose 51 percent to about $32 billion
in the quarter. Payment volumes at Venmo, its mobile
peer-to-peer payment platform popular with younger customers,
more than doubled to $6.8 billion in the first quarter.
"Growth in our Venmo and our core P2P platforms ...
supports higher levels of engagement and reduced levels of churn
across our consumer base," Rainey said.
The company's net income rose to $384 million, or 32 cents
per share, in the first quarter, from $365 million, or 30 cents
per share, a year earlier.
On an adjusted basis, PayPal earned 44 cents per share,
above the average analyst estimate of 41 cents, according to
Thomson Reuters I/B/E/S.
(Reporting by Sruthi Shankar in Bengaluru and Anna Irrera in
New York; editing by Martina D'Couto)