Update 1-PayPal raises full-year earnings forecast above Wall Street estimates

(Adds shares and appoints CFO in paragraph 2)

Nov 1 (Reuters) – PayPal Holdings raised its full-year revised earnings forecast above Wall Street estimates on Wednesday, as the payments giant banks weighed on resilient consumer spending trends during the key holiday shopping season.

The company’s shares rose 2.5% in extended trading after the results. It also appointed Jamie Miller as its new chief financial officer.

Consumer spending has shown remarkable strength this year, with analysts expecting the cheer to extend to the holidays, as companies offer deep discounts on everything from electronics to clothing to entice inflation-weary shoppers.

A report from Adobe Analytics in October showed that online sales during the US holiday season, which includes some of the biggest shopping days like Cyber ​​Monday, Thanksgiving and Black Friday, were expected to rise 4.8% from the previous year.

The company said it expects full-year adjusted earnings to be about $4.98 per share from $4.95 previously. Analysts on average were expecting $4.92, according to LSEG data.

However, analysts remain focused on PayPal’s margins, which have confounded investors in recent quarters. The company’s lower-margin brand products grew strongly, while growth in its branded products slowed due to increasing pressure from competitors such as Apple.

PayPal lowered its annual forecast for adjusted operating margin expansion to 75 basis points from 100 basis points expected earlier. Adjusted operating margin was 22.2% in the third quarter.

PayPal’s revenue jumped 9% to $7.4 billion on a foreign currency-neutral basis in the third quarter ended September. 30. Analysts on average expected $7.38 billion.

US consumer spending rose in September, as households boosted their car purchases and travel, with spending maintaining a higher growth trajectory entering the fourth quarter, according to data from the US Commerce Department.

Total payment volume rose 13% on a foreign-currency neutral basis to $387.7 billion in the third quarter, beating Street forecasts of $377.9 billion.

The company earned $1.30 per share on an adjusted basis in the third quarter, beating Wall Street expectations of $1.23 per share. (Reporting by Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri)