Proactive Investors - PayPal Holdings Inc (NASDAQ:PYPL)’s share price took a near-10% hit in pre-market trading on Thursday after the firm posted weaker-than-expected guidance in its final quarter results.
Diluted earnings should come in at US$5.10 per share over the coming year, the payment system giant said in a post-close statement on Wednesday, below market expectations for US$5.49.
Though PayPal’s fourth quarter results themselves were better than anticipated, XTB brokers noted it had emerged as “a cardinal sin” to post weaker guidance this earnings season.
For the fourth quarter, earnings per share sat 19% higher at US$1.48, operating margins increased by 39 basis points to 23.3% and revenue rose 9% to just above US$8 billion, all outdoing expectations.
Total payment volumes climbed 15% to US$409.83 billion meanwhile, with net income growing 13% to US$1.6 billion.
“I’m pleased with our better-than-expected fourth-quarter results, which are a testament to the incredible work of the PayPal team,” chief executive Alex Chriss commented.
“We're driving significant transformation across our company and are committed to making the necessary changes to our business to drive profitable growth in the years ahead.”
Over the year, revenue was up 8% at US$29.8 billion, while earnings per share jumped by 24% to US$5.10.
PayPal shares slipped 9.25% to US$57.39 in pre-market trading.