(Bloomberg) — PayPal Holdings Inc.’s payment volume rose 14% in the first quarter as consumer spending around the world surged, giving the company’s shares a boost in early trading.
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Total payment volume was $403.9 billion in the first quarter, PayPal said in a statement on Tuesday, beating analyst estimates of $392.9 million. For the full year 2024, the company expects earnings per diluted share to be about $3.65, compared to $3.84 a year ago, when it included gains from the sale of Happy Returns – a company which helps consumers return unwanted items – and the company’s portfolio investment. The forecast was lower than analysts expected.
The company expects adjusted earnings per diluted share to increase “by a mid- to high-single-digit percentage” in 2024, from $3.83, based on the new accounting methodology, last year.
PayPal is looking to reduce expenses and right-size the business after a series of acquisitions. The company overhauled its top leadership late last year and months later announced plans to cut about 9% of its workforce as part of CEO Alex Chriss’ efforts to boost profits.
The CEO said Tuesday that 2024 “remains a year of transition” for the company. “We are focused on execution – driving our key strategic initiatives, realizing cost savings and reinvesting accordingly to position the company for consistent, high-quality profitable growth in the future,” he said.
Chriss intends to take a particularly close look at PayPal’s relationship with small business customers, an area where PayPal has “shifted its focus,” he said on a conference call Tuesday. He said the company intends to correct its approach.
PayPal shares rose 3.5% to $69.40 at 10:19 a.m. in New York. They gained 13% this year.
The company reported $6.53 billion in total operating expenses for the quarter, up from $6.04 billion a year ago. Dollar transaction margin – a key indicator of expense control – increased 4% to $3.5 billion. Revenue rose 9% to $7.7 billion, above analysts’ estimates.
PayPal plans to repurchase at least $5 billion in shares this year, it said in an investor presentation on Tuesday.
(Updates with CEO comments in sixth paragraph, shares in seventh, buybacks in last. A previous version of this story corrected the 2024 forecast in third paragraph.)
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