PayPal Holdings Profit Rises, Inks Deal With Visa

(RTTNews) - Payments technology company PayPal Holdings Inc. (PYPL), Thursday reported an increase in profit for the second quarter, as revenues grew 15 reflecting higher payment volumes and number of users. The company also reached a partnership deal with Visa.

San Jose, California-based Paypal's second-quarter profit rose to $323 million or $0.27 per share from $305 million or $0.25 per share last year.

Excluding one-time items, adjusted earnings rose to $0.36 per share from $0.33 per share last year. On average, 37 analysts polled by Thomson Reuters estimated earnings of $0.36 per share for the quarter. Analysts' estimates typically exclude one-time items.

PayPal's revenues for the quarter grew 15 percent to $2.65 billion from $2.30 billion last year. Analysts had a consensus revenue estimate of $2.60 billion for the quarter.

Operating margin dropped to 14 percent from 17.3 percent last year.

In the second quarter, PayPal processed 1.4 billion transactions, up 25 percent and reported $86 billion in total payment volume, representing FX-neutral growth of 29 percent. The company grew its active account base by 11 percent, ending the quarter with 188 million active customer accounts.

"We have a clear mission at PayPal. We want to democratize financial services and become an everyday, essential service for underserved consumers," said Dan Schulman, President and CEO of PayPal.

Further, PayPal has reached a deal with Visa that will make easier for its pay in brick-and-mortar stores using their smartphones. This will expand acceptance for PayPal's digital wallet to all physical retail locations where Visa contactless transactions are enabled.

Looking forward to the third quarter, PayPal expects earnings of $0.33 to $0.35 per share and revenues of $2.62 billion to $2.67 billion. Analysts currently estimate earnings of $0.35 per share and revenues of $2.61 billion.

For the full year 2016, PayPal expects adjusted earnings of $1.47 to $1.50 per share and revenues of $10.75 billion to $10.85 billion. Analysts currently estimate earnings of $1.49 per share and revenues of $10.70 billion.

Earlier, the company expected revenues of $10.5 billion to $10.7 billion.

PYPL closed Thursday's trading at $40.13, up $0.08 or 0.20%, on the Nasdaq. The stock further rose $0.77 or 1.92 % in the after-hours trade.