PayPal Earnings May Not Be the Main Story
Complete. Here is the key summaryPayPal reports Q2 earnings with expected revenue of $8.47 billion and EPS of $1.28, down 8.6%. Profitability concerns persist as transaction margins decline. However, investors may focus more on takeover speculation, with reports that Stripe and Advent International bid $60.50 per share for PayPal. The board reportedly rejected the offer as too low due to financial and regulatory concerns.
Digital payments company PayPal Holdings (PYPL, Financials) is slated to disclose second-quarter results Tuesday before the market starts.
Analysts predict revenue of $8.47 billion, up 2 percent from a year earlier. Earnings are expected to be $1.28 a share, a decrease of 8.6%.
The total payment volume is expected to reach $473.02 billion. That compared with $463.96 billion in the first quarter and $443.55 billion a year ago.
The main issue is profitability. Transaction margin is projected to decline to 44.17% from 45.61% in the previous quarter and 46.38% a year ago.
And branded checkout growth may slow too. Results could be hurt by Apple Pay/Shop Pay competition, weaker German consumer demand and less European trip expenditure.
But investors might pay more heed to takeover speculation Stripe and Advent International are believed to have bid $60.50 a share for PayPal, valuing the company at more than $53bn.
The PayPal board allegedly believed the bid was too low and voiced concerns about financial and regulatory issues. Investors will now focus on profitability, branded checkout growth and any comments on a potential sale.