Square Warns on First-Quarter Results; Withdraws Full-Year Guidance

Square says effects of coronavirus have intensified in past 10 days and that first-quarter results will be sharply affected.
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Square  (SQ) - Get Report warned Tuesday that first-quarter results will be sharply affected by the effects of the coronavirus as gross processing volume has fallen 25% over the past 10 days.

The company said it now expects to report first-quarter net revenue of $1.3 to 1.34 billion and a gross profit of $515 million to $525 million. The company said the range “assumes a further deceleration in overall GPV through the last week of March, beyond the levels we have seen in recent days.”

Square said it expects to report first-quarter adjusted EBITDA and adjusted earnings per share below the guidance offered on March 5 following its issuance of convertible debt. At the time it forecast a loss of 4 cents a share to 2 cents a share. For the full year it had forecast adjusted EPS of 88 cents a share to 92 cents a share.

Square said the weakness in gross processing volume “has offset relative strength in the Cash App ecosystem, where the impact on gross profit growth has been less pronounced.”

Shares of Square rose 80 cents, or 1.7%, to $47.11 in after-hours trading after gaining 15.75% in the regular session on a strong bounce in markets in anticipation of Congressional coronavirus legislation to offset the economic effects of the coronavirus and related shelter-in-home orders. Tuesday's gain was the best single-day percentage increase ever for Square. 

Elsewhere, fintech stocks were higher Tuesday. 

Among fintech ETFs, The Amplify CrowdBureau ETF  (LEND) - Get Report rose $1.26, or 12.6%, to $11.26.

The ARK Fintech Innovation ETF  (ARKF) - Get Report rose $1.66, or 9.18%, to $19.74.