PayPal sees strong second quarter as online spending surges

PayPal sees strong second quarter as online spending surges

May 23, 2020 Off By ayurceuticscom

PayPal Holdings Inc (PYPL.O) said it expects a strong recovery in payments volumes in the second quarter as social distancing drives more people to shop online, even as lockdowns start to ease, sending its shares up 8% in extended trading.

Online retailers are seeing demand rise, boosting digital payments. PayPal said on Wednesday it added a record 7.4 million net new customers in April.

“Our products and services have never been more needed and more relevant,” Chief Executive Officer Daniel Schulman said on a call with analysts.

In the reported quarter, PayPal’s profit plunged 87.4% as it boosted credit loss reserves, but it still beat market expectations.

“In March, the deteriorating environment resulting from COVID-19 further impacted PayPal’s business, affecting both volumes and revenue generated from travel and events verticals as well as impacting credit income,” the company said.

PayPal processed $191 billion in payments in the first quarter, up 18% from a year earlier, but missed analysts’ estimates of $194.23 billion.

Net income fell to $84 million, or 7 cents per share, in the quarter ended March 31, from $667 million, or 56 cents per share, a year earlier. (bit.ly/2SHfpY2)

Operating income was reduced by a $237 million increase in credit loss reserves, the company said. Excluding this and other one-time items, it earned 83 cents per share. Analysts were expecting a profit of 75 cents per share.