Por Manya Saini e Hannah Lang
BENGALURU/WASHINGTON (Reuters) – PayPal slashed full-year profit forecast on Wednesday, signaling the company’s reported payment volumes could be impacted by rising inflation and conflict in Ukraine.
The company said it expects adjusted earnings of between $3.81 and $3.93 per share, down from a previous estimate of $4.60 to $4.75 per share.
Consumers in the United States have started to tighten their belts in recent months as inflation has reached the highest level in decades, putting pressure on earnings of payment processors like PayPal.
The company is also likely to take a financial hit from the decision to join the corporate boycott of Western companies in Russia over the invasion of Ukraine.
In the first three months of the year, PayPal revenue rose 8% on a currency-neutral basis to $6.5 billion, below Wall Street estimates of $6.6 billion, according to Refinitiv data.
The company processed a total of $323 billion in payments in the first quarter, up 15% from a year earlier. Venmo, the PayPal app that allows US individuals to send and receive money, surged 12% in processed payments to $57.8 billion.
PayPal earned 88 cents a share on an adjusted basis for the quarter, in line with analyst expectations.
The company said it expected adjusted earnings of $0.86 per share for the current quarter, below analysts’ estimates of $1.12 per share.