Payment Company Block Shares Rise 12% After Announcing Earnings That Beat Forecasts

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Payment Company Block Shares Rise 12% After Announcing Earnings That Beat Forecasts

Block, the payments company led by CEO Jack Dorsey, saw its shares surge 12% on Thursday following the release of adjusted core earnings for the current quarter, which are projected to beat Wall Street estimates.

For the quarter ending March 31, the company forecast earnings ranging from $570 million to $590 million. This figure exceeds the average analyst estimate of $511.76 million. Block also revised its full-year profit outlook by more than $200 million, saying it expects 2024 earnings to reach at least $2.63 billion.

Block attributes its positive forecast to a strong holiday season that supported consumer spending despite concerns of an economic downturn. Americans continue to engage in retail shopping, dining and travel.

In order to improve profitability, Block has implemented cost-cutting measures, including downsizing its workforce and reducing its real estate assets. As a result of these actions, the company expects a significant improvement in operating margins for the year.

Block reported a 24% increase in total net revenue for the fourth quarter, reaching $5.77 billion. Excluding Bitcoin transactions, revenue was $3.25 billion, up 15% year-on-year.

In his letter to shareholders, Dorsey emphasized the company’s efforts to reduce expenses and its intention to focus on growth going forward. He noted that Block currently operates with fewer than 12,000 employees and plans to maintain that level until expansion becomes necessary.

Despite these positive developments, Block reported a net loss of 0.02 cents per share for the quarter, in line with analyst expectations.

Earlier in the month, Block’s major rival PayPal said it expected its adjusted profit to remain flat for the current year as it focuses on becoming more efficient and driving profitable growth.

Key Highlights:

  • Block raised its adjusted core earnings estimate for the current quarter.
  • The company also revised its full-year profit outlook.
  • Block attributes this to a strong holiday season.
  • It is implementing cost-cutting measures to improve profitability.
  • CEO Dorsey emphasized his intention to focus on growth.



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