Home / Business / Estimates of gains squared, stock down on weak 2019 outlook

Estimates of gains squared, stock down on weak 2019 outlook

Square's fourth quarter results and earnings, released Wednesday night, exceeded analysts' estimates. But Square's shares fell after hours in line with forecasts for adjusted EBITDA for 2019 – earnings before interest, taxes, depreciation and amortization – missed estimates in a context of increasing investments.


The digital payment processor reported adjusted earnings of 14 cents per share, up 75 percent from last year, with revenues up 64 percent to $ 464 million, including acquisitions. One year earlier, Square (SQ) earnings were 8 cents per share for sales of $ 283 million.

Analysts were expecting a 13-cent Square profit on a $ 454-million business for the period ending Dec. 31. Square shares fell 4.8% to 75.53 today, after opening hours.

Square said fourth quarter adjusted EBITDA increased 97% to $ 81 million. This exceeded estimates by $ 79 million.

Square guide light

For the 2019 fiscal year, Square forecast revenues of between $ 2.22 billion and $ 2.25 billion and a profit of 76 cents midway through its forecast.

Analysts were forecasting earnings per share of 70 cents on a $ 2.25 billion business figure.

Square said it expects EBITDA of between $ 405 and $ 415 million. This does not correspond to the estimates of $ 420.5 million.

Square credit card readers, based in San Francisco, connect to mobile phones and tablets. It invests in new products and services.

Square introduces a new CFO

A significant portion of its growth comes from Square Capital, which offers small business loans and cash advances. Square has contacted the federal regulators to open a deposit bank.

Square's shares reached an all-time high of 101 on October 1, and then sank into disaster after the departure of its chief financial officer.

At the beginning of January, the company brought Amrita Ahuja, a former Activision Blizzard (ATVI), as a new CFO. The call for fourth quarter results will be Ahuja's first with the company.


See how to spot the 3 most profitable chart models

Receive IBD's "How to invest" news bulletin for free

What's a day of follow-up?

How to invest in growth stocks: read this column daily

Check out IBD's YouTube Channel

Source link