(Reuters) – PayPal Holdings Inc lowered its full-year profit view on Wednesday, signaling that payments volumes at the company could take a hit from surging inflation and the conflict in Ukraine.
The company said it expects adjusted profit between $3.81 and $3.93 on a per share basis, down from its previous forecast of $4.60 to $4.75 per share.
Customers in the United States have started tightening their belts in recent months as inflation surges to its highest in decades, pressuring earnings of payment processors like PayPal.
The company is also expected to take a financial hit from its decision to join the Western corporate boycott of Russia over the invasion of Ukraine, which Moscow has called a “special operation.”
In the first three months of the year, PayPal’s revenue rose 8% on an FX neutral basis to $6.5 billion, narrowly missing 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 – PayPal’s app that allows U.S. individuals to send and receive money, posted a 12% jump in payments processed to $57.8 billion.
PayPal earned a profit of 88 cents per share on an adjusted basis, which was in line with analysts’ expectations.
The company said it expected an adjusted profit of 86 cents per share in the current quarter, below analysts’ estimates of $1.12 per share.
(Reporting by Manya Saini in Bengaluru and Hannah Lang in Washington; Editing by Aditya Soni)
