PayPal Holdings reported September-quarter earnings that topped analyst estimates as cost-cutting moves kicked in. But PYPL stock fell as payment volume missed expectations and revenue guidance came in below views.
The e-commerce company released third-quarter earnings after the market close on Thursday.
"Q3 played out largely as expected, with EPS upside driven by expense management, with TPV (total payment volume) impacted by currency exchange rates, while other value-added services delivered the upside to revenues," RBC analyst Daniel Perlman said in a note to clients.
He added: "E-commerce growth slowed near the end of Q3 and has continued into October, thus expectations for a holiday ramp have yet to materialize, driving the more cautious outlook."
PayPal Stock: Payment Volume Light
PayPal earnings for the quarter ended Sept. 30 were $1.08 per share on an adjusted basis, down 2% from a year earlier. The e-commerce company said revenue rose 11% to $6.85 billion.
PYPL stock analysts expected earnings of 96 cents a share on revenue of $6.81 billion. A year earlier, PayPal earned $1.11 a share on sales of $6.18 billion.
Total payment volume processed from merchant customers climbed 9% to $337 billion. Analysts had projected total payment volume of $344.66 billion.
For the current quarter ending in December, PayPal forecast earnings of $1.19 a share on revenue of $7.37 billion amid headwinds from currency exchange rates. Analysts had predicted earnings of $1.18 a share on revenue of $7.73 billion.
PYPL stock fell 1.8% to close at 75.18 on the stock market today.
PYPL Stock: Activist Investor Takes Stake
As e-commerce boomed during the coronavirus pandemic, shares in PayPal soared. But PayPal stock has plunged from an all-time high of 310.16 on July 26, 2021.
Activist investor Elliott Management in July disclosed that it has taken a $2 billion stake in San Jose, Calif.-based PayPal. The e-commerce firm in August added $15 billion to its repurchase program of PYPL stock. PayPal bought $939 million of its own stock in the third quarter.
PayPal holds a Relative Strength Rating of only 22 out of a best-possible 99, according to IBD Stock Checkup. PYPL stock has retreated 59% thus far this year.
Former parent eBay, which spun off PayPal in 2015, has shifted its payment processing from PayPal to Netherlands-based Adyen.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
