PayPal beats Wall Street in fourth quarter
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PayPal beats Wall Street in fourth quarter

Last Wednesday, PayPal reported fourth quarter earnings, handily beating analysts’ expectations on revenue and earnings. The company said revenue was up 24% from the year-ago quarter to $3.71 billion. That outpaced Wall Street’s consensus estimates of $3.63 billion pretty significantly. The company also beat the Street on earnings, which came in at 55¢ per share instead of the 52¢ per share that analysts were expecting.

PayPal’s share price has risen by 95% over the last 12 months

graph 0702 Paypal

SOURCE: Yahoo Finance

Despite these impressive results, PayPal saw its share price decline after the announcement. The reason was bad news from old owner, and long-time partner, eBay.

The Ecommerce auction site took to the internet later that day with a press release saying it had signed a deal with PayPal competitor Adyen. The release stated: “eBay has signed an agreement with Adyen, a leading global payments processor, to become its primary payments processing partner. PayPal, a long-time eBay partner, will be a payments option at checkout for eBay buyers.

PayPal has signed a deal with eBay itself, and will remain a payment option until July 2023 – or until another agreement extends it.

PayPal’s CEO, Dan Schulman, told analysts on an earnings call that “2017 was a transformative year for PayPal with consistently strong and in many cases record breaking results. Throughout 2017, we redefined our competitive position.

Disclosure

Dominion holds PayPal in its Global Trends Ecommerce Fund.


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