PayPal Results Beat Expectations as User Accounts Climb
28 January 2016 - 9:25AM
Dow Jones News
By Ezequiel Minaya
PayPal Holdings Inc. posted better-than-expected results in its
second report as a stand-alone company since parting ways with eBay
Inc. last year, with active user accounts climbing.
The company also said it recent acquisitions, including Xoom
Corp., were among factors boosting results. During the December
quarter, PayPal closed the acquisition of Xoom, pushing along its
growth in the global remittances market. The company said Xoom
added 1.6 million active customer accounts to the PayPal
platform.
PayPal also unveiled a $2 billion stock repurchasing
program.
Shares of PayPal climbed 6.4% to $33.60 after hours. Shares of
PayPal were down 13% so far this year and had fallen more than 14%
since the company split from eBay in July of last year.
PayPal will have to demonstrate it can capture new users for its
online and mobile payments service beyond eBay. Though PayPal has
been assured that roughly 80% of eBay's gross merchandise sales
will be routed through the payments company, it is free to seek out
agreements with new vendors.
PayPal added 6.6 million active customer accounts in the period,
up 3.8% from the third quarter, for a total of 179 million. The
firm has maintained steady sequential growth in users of between 2%
and 3% for several quarters.
In the December quarter, the company processed 1.4 billion
payment transactions, which translates to 27 payment transactions
per active account, an increase from 25 transactions per active
account a year earlier.
For the fourth quarter, PayPal's earnings rose to $367 million,
or 30 cents a share, up from $286 million, or 23 cents a share a
year earlier. Excluding certain items, the company posted per-share
earnings of 36 cents, up from 29 cents a year earlier and above the
average analyst estimate of 35 cents, according to Thomson
Reuters.
The San Jose, Calif., company said revenue rose 17% in the
fourth quarter to $2.56 billion, which was above the average
analyst estimate of $2.51 billion on Thomson Reuters.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
January 27, 2016 17:10 ET (22:10 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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