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PayPal achieves the highest returns because COVID-19 leads to a large increase in e-commerce



Shares of PayPal Holdings Inc. PYPL.
+ 4.72%
grew by more than 3% in trading on Wednesday afternoon after the digital payment company exceeded expectations regarding profits and revenues due to the rapid growth of online transactions. (Learn more about the company’s earnings in a MarketWatch interview with CEO Dan Schulman.) PayPal reported net income of $ 1.53 billion, or $ 1.29 per share, from $ 823 million, or 69 cents a share, in the prior quarter. PayPal̵

7;s adjusted earnings per share increased $ 1.07 per share from 71 cents a year ago, while FactSet’s analysts modeled 87 cents. This includes a 7 percent negative impact on provisions for loan losses. Revenue for the quarter rose to $ 5.26 billion from $ 4.31 billion. FactSet’s consensus demanded $ 4.99 billion. The total volume of PayPal payments, or the value of transactions flowing through the PayPal platform, rose from $ 222 billion to $ 222 billion, while analysts were looking for $ 210 billion. The company also recorded approximately $ 37 billion in Venmo payments. In total, PayPal added 21.3 million net new active accounts during the period. The company announced that it has had more than 60 million active Venmo accounts since the second quarter, which the company defines as accounts that have completed a transaction within a 12-month spread. In the third quarter, PayPal expects total payments to increase by 30%, revenue to increase by 25% on a currency-neutral basis, and adjusted earnings per share to increase by 25%. The company also renewed its 2020 forecast following the withdrawal of the previous forecast at the beginning of the year due to uncertainties related to the pandemic. For the full year, the company expects a high 20% increase in total payments, a 22% growth in monetary neutral revenues and approximately 25% growth in adjusted EPS. PayPal shares have gained 49% in the last three months as the S&P 500 SPX,
+ 1.24%
increased by 11%.


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