2018-10-18 11:19:08 | Fly Intel: What to watch in PayPal earnings reportPayPal (PYPL) is scheduled to report results of its third fiscal quarter after market close on October 18, with a conference call scheduled for 5:00 pm EDT. What to watch for: 1. OUTLOOK: During the company's last earnings call, PayPal said it sees third quarter earnings per share between 53c-55c and revenue of $3.62B-$3.67B, with consensus at 54c and $3.71B, respectively. The company also raised its FY18 EPS view to $2.32-$2.35 from $2.31-$2.34, and its revenue forecast to $15.3B-$15.5B from $15.2B-$15.4B. 2. VENMO OUTLOOK: Back in August, Baird analyst Colin Sebastian raised his price target for PayPal to $99 from $96 to reflect a favorable view of Venmo's monetization opportunity. Sebastian pointed out that a survey of 1,500 Internet users showed PayPal as the "clear and dominant digital wallet." The analyst also said he believes Venmo could be approaching native wallet levels like Apple's (AAPL) ApplePay. While still early, PayPal's dual-brand strategy could reasonably contribute $150M-$300M incrementally to 2021 operating profit and potentially more, Sebastian contended. Overall, he believes Venmo is on track to become a billion-dollar business, and while it may not fully replace the lost contribution profit from eBay (EBAY), investors are likely to put a premium on Venmo-generated incremental revenues. This week, PayPal announced that it is raising a Venmo charge as part of a broader effort to make money from the payment service, sparking backlash from users on social media, Bloomberg reported. PayPal will charge 1% when Venmo users transfer money to their bank accounts in 30 minutes or less, starting November 6, up from the 25c fee the service previously charged on the transactions. 3. PARTNERSHIPS: Earlier this month, Walmart (WMT) and PayPal said they were teaming up to provide financial services and products that help their shared customers. As part of this collaboration, the two companies will begin rolling out PayPal cash in and cash out money services at Walmart for an exclusive fee of $3 per service. This is the first time PayPal mobile app users will be able to take cash out of their PayPal account in a brick-and-mortar environment, in addition to being able to load cash into their PayPal balance at Walmart stores. Additionally, like PayPal mobile app users, PayPal Cash Mastercard customers can now access their cash balance using Walmart Service Desks, ATMs and cash registers for the same fee. PayPal cash in is immediately available at Walmart, and PayPal cash out will be available at all U.S. Walmart locations by early November. 4. EXECUTIVE CHANGE: Last month, The Wall Street Journal reported that PayPal promoted Amit Jhawar to the position of general manager for money-transfer service Venmo, the second time in two years a new manager has been named. Jhawar is Venmo's third general manager since the end of 2016 and his predecessors split their time between Venmo and other PayPal projects. Joanna Lambert, who managed Venmo until early 2017, was also responsible for PayPal's push into financial services for consumers, left in March for a job at Verizon (VZ). Lambert's successor, Kevin Laracey, also handled PayPal's Paydiant division, which develops technology allowing physical retailers to accept mobile payments and coupons. | |
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