PayPal Results Beat Expectations as User Accounts Climb

PayPal Holdings Inc. posted better-than-expected results in its second report as a stand-alone company since parting ways with eBay Inc. last year, with active user accounts climbing.

The company also said it recent acquisitions, including Xoom Corp., were among factors boosting results. During the December quarter, PayPal closed the acquisition of Xoom, pushing along its growth in the global remittances market. The company said Xoom added 1.6 million active customer accounts to the PayPal platform.

PayPal also unveiled a $2 billion stock repurchasing program.

Shares of PayPal climbed 6.4% to $33.60 after hours. Shares of PayPal were down 13% so far this year and had fallen more than 14% since the company split from eBay in July of last year.

PayPal will have to demonstrate it can capture new users for its online and mobile payments service beyond eBay. Though PayPal has been assured that roughly 80% of eBay's gross merchandise sales will be routed through the payments company, it is free to seek out agreements with new vendors.

PayPal added 6.6 million active customer accounts in the period, up 3.8% from the third quarter, for a total of 179 million. The firm has maintained steady sequential growth in users of between 2% and 3% for several quarters.

In the December quarter, the company processed 1.4 billion payment transactions, which translates to 27 payment transactions per active account, an increase from 25 transactions per active account a year earlier.

For the fourth quarter, PayPal's earnings rose to $367 million, or 30 cents a share, up from $286 million, or 23 cents a share a year earlier. Excluding certain items, the company posted per-share earnings of 36 cents, up from 29 cents a year earlier and above the average analyst estimate of 35 cents, according to Thomson Reuters.

The San Jose, Calif., company said revenue rose 17% in the fourth quarter to $2.56 billion, which was above the average analyst estimate of $2.51 billion on Thomson Reuters.

Write to Ezequiel Minaya at [e-mail]

(END) Dow Jones Newswires

January 27, 2016 17:15 ET (22:15 GMT)

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