PayPal Lowers Guidance, Cites Virus Effect on International E-Commerce

PayPal (PYPL) - Get Report forecast lower-than-expected first-quarter revenue as the spread of the coronavirus takes a mounting toll on global commerce.

At last check shares of the San Jose, Calif., digital-payments processor were 0.8% higher at $109.97. 

The company cut its guidance on first-quarter revenue growth by a full percentage point from its previous estimate on Jan. 29.

"We have been carefully assessing the effect of covid-19" - the 2019 coronavirus - "as conditions continue to evolve," PayPal said in a statement. 

"PayPal's business trends remain strong; however, international cross-border e-commerce activity has been negatively impacted by covid-19."

PayPal now expects first-quarter revenue to come in at the lower end of its previously forecast range of $4.78 billion to $4.84 billion. A survey of analysts by FactSet was estimating Q1 revenue at $4.83 billion.

Still, the online-payments giant affirmed its first-quarter GAAP and non-GAAP guidance on earnings per share.

PayPal also said "stronger performance quarter to date" is "partially offsetting this 1-percentage-point negative impact."

PayPal hit 305 million users worldwide in fourth-quarter 2019, having added 9.3 million.

The company has said, however, that a significant part of its 2020 growth plan involves building out infrastructure in China, which has been ground zero for the coronavirus outbreak.

PayPal's fourth-quarter earnings beat analysts' estimates, ringing in at 86 cents a share, against the consensus forecast of 83 cents.

But in its just-released first-quarter guidance, PayPal also cautioned that trying to assess the impact of covid-19 is difficult given the constantly shifting nature of the threat.