PayPal lowered its forecast for adjusted profit for 2022 to a range of $3.81 to $3.93 a share.
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PayPal Holdings said its first quarter was a “solid start” but cut its outlook for the full year, bracing for payments volumes to weaken.
Its forecast for adjusted profit per share is now in a range of $3.81 to $3.93, down from a prior forecast of $4.60 to $4.75 a share. Net revenue is projected to rise 11% to 13%, down from an earlier forecast of 15% to 17%.
Red-hot inflation is putting a damper on consumer spending as households are forced to compromise on nonessential items such as dining out, travel and entertainment.
During the first three months of this year, PayPal ’s (ticker: PYPL) revenue rose 8%, to $6.5 billion. Analysts tracked by FactSet had expected $6.4 billion. Adjusted earnings per share of 88 cents matched expectations.
PayPal’s shares gained 6.4% in after-hours trading, but are down 56.2% year-to-date. The S&P 500 gained 0.2%, and the Dow Jones Industrial Average gained 0.2% in comparison.
PayPal added 2.4 million net new active accounts in the first quarter, for a total of 429 million active accounts, and expects to add 10 million new active accounts in 2022. Payment volume rose 13%, to $323 billion, over last year, about even with the consensus on FactSet.
“I’m pleased our first quarter results exceeded our guidance on revenue and earnings, and we continue to grow faster than the rate of ecommerce. We have much to be proud of but we know we can continue to do even better,” CEO Dan Schulman said in a statement.
PayPal said Chief Financial Officer John Rainey is leaving to join Walmart (WMT) on June 6. Gabrielle Rabinovitch, senior vice president for corporate finance and investor relations, will be interim CFO while PayPal looks for a permanent successor.
PayPal, based in San Jose, Calif., is planning to close its San Francisco office, which housed its Xoom business, on June 3. Employees will be able to work virtually or from the San Jose office.
A spokesperson told Barron’s in an email that “We are continually looking at and evolving how we can work in the most collaborative and efficient ways possible, and we routinely evaluate our global office footprint and spaces to ensure that our company and our employees are best set up for success. The pandemic, in particular, has taught us there are many ways in which we can work effectively while providing our employees with flexibility.”
The company added it is committed to the Bay Area and California and will continue to hire and invest in the state.
Write to Janet H. Cho at [email protected]Corrections & amplifications: Shares of PayPal are down 56.2% year to date. An earlier version of this article incorrectly said they were up.
