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What you need to know
- PayPal shares fell Tuesday morning after the company's adjusted earnings fell short for the fourth quarter.
- The company's projections for adjusted earnings per share in the first quarter and 2025 also missed estimates.
- PayPal’s revenue and net profit exceeded estimates. They also announced that they would be launching a $15 billion buyback program for its stock.
PayPal’s shares plunged on Tuesday, as its adjusted earnings failed to meet expectations for the last quarter of 2024.
Visible Alpha estimates that the owner of the platform with the same name and other platforms such as Venmo, reported $8.37 Billion in revenues for the fourth-quarter, an increase of 4% over the previous year. This was better than $8.26 Billion analysts expected.
PayPal (PYPL’s) net profit came to $1.12billion, or $1.11 a share. This is down by 20% compared with a year earlier, but still slightly above analysts’ expectations of $1.08billion and $1.06 / share. Analysts expected there to be a greater difference between adjusted and net income. Analyst consensus was $1.44 billion. The adjusted earnings of the company came to $1.21 billion.
The EPS projections are higher than the estimates, while the adjusted outlook falls short
That gap continued into PayPal's 2025 projections, with the company's forecast topping earnings per share projections while its adjusted EPS projections fell short.
PayPal estimates that it will earn from $1.11 up to $1.13 a share in the first quarter. Analysts had estimated $4.67 per share and $1.07 per share. But the company has said that it will expect adjusted earnings per shares of between $1.15 and $1.17 for the first-quarter and from $4.95 and $5.10 by 2025. These are well below $1.36 for analysts and the $5.83 consensus.
In addition, the payments processor said that on Tuesday its board had approved a $15 billion buyback of its stock. This is in addition to $4.86billion that was left under its old program which began in The second quarter of 2022.
PayPal shares dropped over 9% in value on Tuesday but have still risen around 30% since the beginning of last year.
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