Stockmarket

PayPal Falls On Worries Over Erosion Of eBay Business



© Reuters.

By Dhirendra Tripathi

Investing.com – PayPal (NASDAQ:) stock fell more than 5% Thursday as its second-quarter revenue came in below expectations, leading to worries that the damage from its former parent eBay (NASDAQ:) moving payments away from it could be greater than anticipated.

Paypal and eBay parted ways in 2018 as the latter wanted to give shoppers more control over their online experience, much like Amazon (NASDAQ:), giving them options to pay for their purchases.

eBay marketplaces represented 4% of its total payments volume in the second quarter compared to 17% in second quarter five years ago. PayPal expects that to further dilute to less than 3% as it exits 2021, calling eBay marketplaces a headwind to its growth in 2021.

Total revenue in the second quarter rose 19% to $6.24 billion, missing the estimated $6.27 billion.

Adjusted earnings per share on a diluted basis came in at $1.15 and surpassed analysts’ expectation of $1.12.

The company processed payments amounting to $311 billion in the second quarter, growing 40% as users turned to online sites for nearly everything, from paying to watch content to ordering food to buying clothes and groceries.

It added 11.4 million net new active accounts to close the quarter at 403 million.

PayPal said it expects third-quarter net revenue to be in the range of about $6.15 billion to $6.25 billion and adjusted EPS at $1.07. 

 

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