Payments firm Block’s profit misses estimate on underwhelming holiday spending

BLOCK’S fourth-quarter profit fell short of estimates as spending growth during the holiday season and gains from a post-election surge in bitcoin lagged expectations, sending the payment firm’s shares down 7 per cent after market close on Thursday.

While a robust labour market and steady wage growth have supported consumer spending - bolstered further by holiday travel and retail splurges - uncertainty surrounding trade policy under a new administration and the Federal Reserve’s rate cuts has kept sentiment in check.

Block’s results come on the same day that retail giant Walmart fueled concerns over consumer spending with a sales and profit forecast for the current year that fell short of Wall Street estimates.

The Jack Dorsey-led payments firm reported a profit of 71 cents per share, excluding one-time costs. Analysts had expected a figure of 87 cents per share, according to estimates compiled by LSEG.

Its transaction-based revenue was US$1.68 billion, compared with the expectations of US$1.70 billion. Bitcoin revenue of US$2.43 billion also missed estimates of US$2.62 billion.

Block facilitates bitcoin purchases on its platform by acquiring the cryptocurrency through private broker dealers and reselling it at a small premium. REUTERS