PayPal sees revenue hit from coronavirus outbreak
Feb 28, 2020
Payments processor PayPal Holdings Inc said on Thursday it expects first-quarter revenue to be at the lower end of its previously forecast range, as online transactions globally took a hit from the coronavirus outbreak.
Several companies, including Apple Inc, Mastercard Inc and American Airlines Group Inc, have warned of a hit from the rapid spread of the epidemic that has disrupted supply chain, hurt global travel and led to temporary shutdowns of businesses.
PayPal, which derives nearly half of its total revenue from international operations, forecast first-quarter revenue of $4.78 billion to $4.84 billion last month.
“We currently estimate the negative impact from COVID-19 to be an approximate one percentage point reduction, to PayPal’s year-over-year revenue growth for the first quarter,” the company said in a statement.
PayPal, however, said the negative impact of the virus was partially offset by strength in its diversified business, which includes its domestic operations.
The virus, which has killed more than 2,700 and infected 78,000 people so far in China, has slammed the brakes on the world’s second-largest economy. It has spread to 44 other countries, raising fears of a global pandemic.
PayPal said it was reaffirming its first-quarter adjusted earnings of 76 cents to 78 cents per share. Analysts were expecting earnings of 78 cents per share and revenue of $4.83 billion.
On Monday, Mastercard said its first-quarter net revenue would take a hit of between 2 and 3 percentage points over its previous forecast if the coronavirus outbreak persists through the quarter.
Shares of PayPal were down about 1% in morning trading. Mastercard fell about 4%, Visa Inc about 2% and American Express was down 3.4%.
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