FILE PHOTO: Block Inc logo is seen displayed in this illustration taken, April 10, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) -Shares in Jack Dorsey-led Block surged 12% on Thursday after the payments firm forecast adjusted core earnings for the current quarter above Wall Street estimates, betting on continued consumer resilience and its cost-cutting measures.
The company expects adjusted core earnings between $570 million and $590 million for the three months ended March 31, compared with analysts' average expectation of $511.76 million, according to LSEG data.
Block also raised its full-year profit guidance by more than $200 million, forecasting 2024 earnings of at least $2.63 billion, or at least 15% growth from the previous year.
A robust holiday season has put consumer spending on a stronger path heading into 2024 as Americans put aside worries of an economic slowdown to keep shopping, dining out and traveling.
Meanwhile, Block has been looking to lower costs and drive "profitable growth" in the business by cutting jobs and reducing its real estate footprint. The company has previously said it expects significant improvement in operating margins this year as these measures bear fruit.
Total net revenue rose 24% to $5.77 billion in the fourth quarter. Excluding bitcoin, revenue came in at $3.25 billion, up 15% compared to a year earlier.
"We’ve done a lot recently to reduce our costs. Now we’re going to focus on growth," CEO Jack Dorsey wrote in a letter to shareholders, noting that Block is below its cap of 12,000 employees and intends to stay that way "until we feel it’s holding us back."
Net loss in the quarter came in at $0.02 cents per share, in line with analyst expectations.
Earlier this month, larger rival PayPal had forecast flat growth in adjusted profit for the current year as it seeks to turn leaner, drive profitable growth and ease pressure on its shares.
(Reporting by Hannah Lang in Washington; Editing by Chris Reese and Sonali Paul)
