US-based payments company, Paypal reported quarterly results after the market yesterday, and at the high level, they looked solid with total payment volume of $US354.51bn for the quarter, up 9.8% yoy and above expectations producing revenue of $7.04bn which was up 8.6%. However, there were disappointing aspects to the update that imply ongoing weakness is likely. They grew payment volumes well, and earnings were up, however, the delta between the increase in volumes and the uptick in earnings was disappointing i.e. volumes beat by ~3% while earnings beat by ~1%. This tells us that margins are an issue and to that end, they lowered their operating margin expansion outlook from 125bps to 100bps.
MM is likely to cut PYPL from the International Equities Portfolio
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