PayPal said that after thoroughly analyzing the evolving Coronavirus effect, it is anticipating about a 1 percent drop in its first-quarter 2020 revenue, closer to the lower end of the forecasted range of $4.78 to $4.84 billion.
“We currently estimate the negative impact from COVID-19 to be an approximate one percentage point reduction, on both a spot and foreign currency-neutral basis, to PayPal’s year-over-year revenue growth for the first quarter, as compared to the revenue guidance provided on Jan. 29, 2020,” PayPal said in a press release on Thursday (Feb. 27).
PayPal said that “business trends” are still going strong, but that “international cross-border eCommerce traffic” has taken a hit due to the Coronavirus, which is also known as COVID-19.
Because PayPal’s diversified business performed strong quarter-to-date, that partially offset the 1 percent negative impact. The payments firm also said it was reaffirming first0quarter 2020 GAAP and non-GAAP EPS guidance.
“At this time, the duration of COVID-19’s impact is difficult to estimate. We are continuing to closely monitor this evolving situation,” PayPal said.
The company noted that the well-being and welfare of employees was its primary concern and that it would assist those in need. “Our thoughts continue to be with the communities and individuals affected by this disease,” the statement said.
PayPal plans to provide further updates on its first-quarter earnings call in April.
Amazon sellers who developed businesses around inexpensive and efficient China manufacturers are reportedly in a tough position, as the spreading Coronavirus closes production facilities. A kitchen products merchant said, “I don’t think the Amazon platform has seen such a massive amount of inventory problems as we are about to see.”
Papa John’s has temporarily shuttered approximately 50 locations of its 210 stores in China because of the Coronavirus. And due to the drop in global and domestic aviation travel, U.K. travel food firm SSP cautioned about a 50 percent drop in February sales in the Asia Pacific region.