WEBVTT - Bloomberg's Soper on PayPayl Earnings and Pact With Visa(Audio)

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<v Speaker 1>Global business news twenty four hours a day at Bloomberg

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<v Speaker 1>This is a Bloomberg Business flag from Bloomberg World Handquarters.

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<v Speaker 1>I'm Charlie Pellette. A lot of breaking news after the

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<v Speaker 1>ballot's run down the headlines, j C. Penny says Mike

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<v Speaker 1>Allman will retire. J C. Penny naming CEO Marvin Ellison

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<v Speaker 1>as chairman. Roger Rails, who has resigned as head of

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<v Speaker 1>the Fox News Channel, felled by sexual harassment accusations leveled

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<v Speaker 1>by a former anchor. He will be succeeded by twenty

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<v Speaker 1>first century Fox founder and chairman Rupert Murdoch. Chippotle reporting

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<v Speaker 1>second quarter earnings per share eighty seven cents estimates there

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<v Speaker 1>ninety one cents. Visa posting fiscal third quarter profit. The

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<v Speaker 1>Beat analysts estimates Starbucks third quarter adjusted EPs forty nine cents.

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<v Speaker 1>Estimates there were for forty nine cents. Stocks lower the

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<v Speaker 1>DAL the SMP nestak all declining today, SMP down seven

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<v Speaker 1>sixty five, a drop of four tenths of one percent.

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<v Speaker 1>Gold up twelve ninety anounced thirty two a gain of

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<v Speaker 1>one I'm Charlie Pollock. That's a Bloomberg business flash. You're

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<v Speaker 1>listening to taking stock with pin Box and Kathleen Hayes

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<v Speaker 1>on Bloomberg Radio. Shares of PayPal are higher right now

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<v Speaker 1>by more than two and a quarter percent and after

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<v Speaker 1>hours trading after the company reports a second quarter results,

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<v Speaker 1>earnings per share a thirty six cents at matches the

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<v Speaker 1>average analyst estimate of thirty six cents, but the company

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<v Speaker 1>demonstrates that sales are growing. Sales for the quarter two

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<v Speaker 1>point six five billion, much better than the two point

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<v Speaker 1>six billion expected by analysts, and also taking a look

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<v Speaker 1>at the third quarter, PayPal says that they will earn

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<v Speaker 1>between thirty three and thirty five cents to share. Previous

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<v Speaker 1>estimate was for thirty five cents. The company also saying

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<v Speaker 1>that sales for the year will increase. Let's find out

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<v Speaker 1>more from Spencer Soper. He is our technology and e

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<v Speaker 1>commerce reporter from Bloomberg News, joining us from our Seattle

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<v Speaker 1>bureau and you can follow Spencer on Twitter at Spencer

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<v Speaker 1>Soaper s o p e Er. Spencer tell us about

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<v Speaker 1>the results from PayPal holdings. Yeah, thanks, uh, and you

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<v Speaker 1>gave a good rundown. You look like a good second

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<v Speaker 1>quarter and they beat on on their forecast as well.

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<v Speaker 1>One thing, um, the one other thing going on is

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<v Speaker 1>that they simultaneously announced the deal with Visa, uh, you

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<v Speaker 1>know largest credit cards who were regarding fees and uh

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<v Speaker 1>and in how they um have their customers link PayPal

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<v Speaker 1>accounts to either bank accounts or credit cards and on

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<v Speaker 1>data sharing and that was a big deal as well.

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<v Speaker 1>And so uh it could be the stock reacting to

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<v Speaker 1>that deal with with with Visa as well. Well, you've

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<v Speaker 1>written a spencer that PayPal is going to stop discouraging

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<v Speaker 1>customers from linking accounts to Visa cards and then to

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<v Speaker 1>share more data with the card networking ext change for

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<v Speaker 1>what they describe as long term visa fee certainty. That

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<v Speaker 1>means they're going to just make money. Yeah, well it's it.

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<v Speaker 1>It ends some uncertainty. There's been these sticking points between

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<v Speaker 1>these two players. Especially more and more transactions you know,

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<v Speaker 1>go digital and PayPal put continues to grow. It's a

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<v Speaker 1>bigger thorn on the side of visas another announces agreement.

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<v Speaker 1>And the one key sticking point is what's what's called

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<v Speaker 1>a c H steering. If you make a payment on

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<v Speaker 1>PayPal that's linked to your bank account, that is a

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<v Speaker 1>less expensive transaction for PayPal than if you make a

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<v Speaker 1>transaction on PayPal that's linked to your Visa card. So

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<v Speaker 1>PayPal has had this incentive to steer customers towards bank

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<v Speaker 1>accounts as opposed to credit cards or debit cards. And

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<v Speaker 1>uh and Visa wanted to put an end to that.

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<v Speaker 1>And the main trigger that Visa had that it could

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<v Speaker 1>have pulled and didn't could have been imposing a higher

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<v Speaker 1>fee on PayPal transactions. Um. And so this kind of

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<v Speaker 1>removes that threat for PayPal, which uh there have been

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<v Speaker 1>some tough talk Visa CEO about that uh uh you know,

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<v Speaker 1>potential potential threat. And I think investors were uh happy

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<v Speaker 1>just to see this see this issue resolved. Now. Well,

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<v Speaker 1>the shares of pay Pal, as I said, they're up

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<v Speaker 1>about two and a half percent and after hours trading,

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<v Speaker 1>all right, So this kind of buries the hatchet between

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<v Speaker 1>PayPal holdings and a Visa Visa coming out, I mean,

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<v Speaker 1>rather PayPal coming out and reporting sales that were better

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<v Speaker 1>than analysts estimated. Is that going to be a trend

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<v Speaker 1>because taking a look at the rest of the year,

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<v Speaker 1>the company seems to also be saying that they expect

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<v Speaker 1>sales to be pretty good. Yeah, they're, they're um, uh,

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<v Speaker 1>they've updated their app. They're seeing more more traction from that,

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<v Speaker 1>a big emphasis on mobile, uh emphasis on venmo is

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<v Speaker 1>their peer to peer platform which you know, I can

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<v Speaker 1>give you twenty dollars to share a restaurant bill, uh

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<v Speaker 1>without for free, without any fees. But they're they're making

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<v Speaker 1>a progress of monetizing that, trying to make that a

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<v Speaker 1>payment for merchants as well, where we're where PayPal is

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<v Speaker 1>actually making some money off of that. So they have

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<v Speaker 1>uh in their in their brain Tree platform which powers

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<v Speaker 1>all kinds of things including uber um. You know, you're

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<v Speaker 1>seeing strong growth. So yes, they they're, they're they're well

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<v Speaker 1>positioned in the in the digital payment spaces. More and

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<v Speaker 1>more transactions are made digitally. Well, maybe that's why they're

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<v Speaker 1>saying that the third quarter revenue number is going to

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<v Speaker 1>be between two point six two billion and two point

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<v Speaker 1>six seven billion. They previously the estimate was for two

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<v Speaker 1>six one. So they're increasing their guidance for third quarter sales. Yeah. Yeah,

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<v Speaker 1>so they're seeing, uh seeing something something Rosie Rosie there

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<v Speaker 1>all right. Sale shares are up now three percent in

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<v Speaker 1>the after hours trade. Tell me about eBay. We noted

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<v Speaker 1>that eBay stock has moved higher today by more than

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<v Speaker 1>ten and a half percent of two dollars and nine

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<v Speaker 1>for eBay. They surprised investors yesterday after the close. Yeah,

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<v Speaker 1>eBay had a big a big quarter and a big beat.

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<v Speaker 1>But the main thing beyond the numbers is that they've

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<v Speaker 1>been talking for several quarters now about these back end

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<v Speaker 1>initiatives they've been taking on to take better advantage of

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<v Speaker 1>their data to drive more sales um and, and they've

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<v Speaker 1>they've cautioned investors it's going to be a year's long project,

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<v Speaker 1>and they're they're finally starting to see, um see some

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<v Speaker 1>results of that in terms of of growth. Uh. And,

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<v Speaker 1>and that's been the main main thing is can what

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<v Speaker 1>can eBay do to to return to growth? Still growing

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<v Speaker 1>slower than the e commerce overall, but investors, why, we're

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<v Speaker 1>encouraged by what they what they saw after you know,

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<v Speaker 1>several quarters of promises and assurances. Yeah, they said that

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<v Speaker 1>full year revenue would be almost nine billion dollars. That's

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<v Speaker 1>well a second quarter revenue was up more than six percent. Yeah,

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<v Speaker 1>and uh, eBay CEO Devin when they remarked on the

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<v Speaker 1>call that that they were seeing results sooner than they

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<v Speaker 1>than they expected. Um, so I was encouraging, uh encouraging

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<v Speaker 1>quarter for m and investors like what they saw. Well.

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<v Speaker 1>Certainly eBay shares, as I said, up nearly eleven percent

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<v Speaker 1>today the stock of eBay, but for the year up

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<v Speaker 1>only nine percent. So this rebound is certainly helping investors,

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<v Speaker 1>but only in the last several weeks. Thanks very much

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<v Speaker 1>for spending time with the Spencer Soaper is our a

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<v Speaker 1>tech and e commerce reporter for a Bloomberg News joining

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<v Speaker 1>us from our Seattle bureau. He can be followed on

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<v Speaker 1>Twitter at Spencer Soaper. That's s O p e Er.

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<v Speaker 1>This is taking stock. I'm pim Fox. Thanks thanks to

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<v Speaker 1>Reggie Basil, our engineer, our producer, Sam Lenga, and this

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<v Speaker 1>is Bloomberg. Coming up on Bloomberg Law, a discussion about

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<v Speaker 1>a lawsuit against the Motion Picture Association for giving ratings

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<v Speaker 1>of g PG and PG thirteen, two movies that have

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<v Speaker 1>smoking in them. That's next