PayPal Holdings Inc. fell short of expectations Monday with its holiday-quarter outlook while also announcing a new arrangement with Amazon.com Inc. through which Venmo users will be able to use the service as a checkout option on the e-commerce giant’s platform.
The company reported net income of $1.09 billion, or 92 cents a share, compared with net income of $1.02 billion, or 86 cents a share, in the year-earlier quarter.
After adjusting for stock-based compensation and other expenses, PayPal
PYPL,
earned $1.11 a share, up from $1.07 a share a year earlier. Analysts tracked by FactSet were expecting $1.07 in adjusted earnings per share.
PayPal’s revenue for the third quarter rose to $6.18 billion from $5.46 billion, while analysts had been expecting $6.23 billion.
The company generated $310 billion in total payment volume, or the value of payments flowing through its system, with the metric up 26% from a year earlier. Analysts were projecting $312.5 billion in TPV. PayPal said that its TPV would have increased 31% when excluding contributions from eBay Inc.
EBAY,
which is in the process of migrating to its own payments system.
Venmo processed $60 billion in TPV, up 36% from a year earlier. PayPal announced that U.S. Venmo users will have the option to pay for Amazon purchases with the service starting early next year.
PayPal had 416 million active accounts in the quarter, up from 403 million as of the second quarter.
For the fourth quarter, PayPal expects $6.85 billion to $6.95 billion in revenue as well as $1.12 in adjusted EPS. Analysts were anticipating revenue of $7.24 billion and adjusted EPS of $1.28 a share.
Shares of PayPal rose more than 4% in after-hours trading; the stock has declined 18% over the past three months, as the S&P 500
SPX,
has gained 6%.
This post was originally published on Market Watch
