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.
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