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Business News/ Companies / News/  PayPal tumbles after firm forecasts little profit growth in 2024
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PayPal tumbles after firm forecasts little profit growth in 2024

Fourth-quarter payments volume for PayPal exceeded expectations, but the company expects adjusted earnings to remain unchanged for 2024.

A PayPal sign is seen at its headquarters in San Jose, California (Photo by Justin Sullivan / Getty Images via AFP)Premium
A PayPal sign is seen at its headquarters in San Jose, California (Photo by Justin Sullivan / Getty Images via AFP)

PayPal Holdings Inc. shares tumbled late Wednesday after the company said it expects earnings to be flat this year as it continues to cut costs and streamline its operations.

Shares of the fintech firm slid 7.9% to $58.24 at 6:28 p.m. in New York. The stock had gained 3% this year through the close of regular trading.

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Fourth-quarter payments volume climbed 15% to $409.8 billion, beating analysts’ estimates of $403.6 billion, while adjusted earnings totalled $1.48 a share, topping the $1.36 average forecast. For all of 2024, PayPal expects adjusted earnings of $5.10 a share, unchanged from last year, the San Jose, California-based company said in a statement.

PayPal announced last month that it will cut about 9% of its workforce, part of Chief Executive Officer Alex Chriss’s efforts to boost profits. In November, he blamed PayPal’s slow progress on its cost base and complex structure.

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The company still has ample expenses that can be reevaluated beyond its headcount as it works to become more efficient, Chriss said in an interview. “We’re continuing to look across the entire organization."

The firm plans to buy back at least $5 billion of its stock this year, Chief Financial Officer Jamie Miller said on a conference call with analysts. 

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Fourth-quarter net revenue totalled $8.03 billion, up 8.7% from a year earlier. Transaction margin dollars — or revenue minus transaction costs and transaction and credit losses divided by net revenue — was $3.67 billion. That metric, a key indicator of expense control, was little changed from a year earlier.

PayPal plans to stop providing annual revenue guidance in favour of doing so quarterly, Miller said during the conference call.

“We are just doing too many things," she said. “We have to make decisions to stop doing things, and just focus."

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This story has been published from a wire agency feed without modifications to the text.

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Published: 08 Feb 2024, 06:58 AM IST
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