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(Reuters) – PayPal (NASDAQ:PYPL)’s forecast of flat growth in adjusted profit for the current year overshadowed its market-beating earnings report, sending shares of the payments giant down 7% in extended trading.

On a post-earnings call, newly appointed CEO Alex Chriss laid out a strategic plan to turn the company leaner in its pursuit of driving profitable growth and ease pressure on its shares, which was one of the worst performers on the Nasdaq 100 Index in 2023.

“We want to be clear eye in terms of the potential near-term benefits from our initiatives, which is why our 2024 guidance includes minimal contribution from the innovations we recently announced,” Chriss said.

“It will take time for some of our initiatives to scale and move the needle,” he added.

The company expects adjusted earnings per share of $5.10 for 2024, unchanged from a year earlier. It did not provide an outlook for revenue and operating margin for the full year.

PayPal said the profit forecast reflects adjustments of roughly $1.8 billion, including estimated stock-based compensation expense and related payroll taxes, alongside a restructuring charge of roughly $120 million.

That eclipsed the firm’s upbeat fourth-quarter earnings report, which sailed past Wall Street estimates on the back of a strong holiday shopping season.

PayPal posted a fourth-quarter adjusted profit of $1.48 a share for the three months ended Dec 31. Analysts on average had expected $1.36 per share, according to LSEG data.

Revenue rose 9% to $8 billion in the quarter, on a currency-neutral basis, also beating expectations of $7.87 billion.

“RESET BUTTON”

Analysts at Jefferies said the company had hit the “reset button” with its full-year profit forecast but added the fourth-quarter results were solid.

PayPal’s stock struggled last year on fears that the entry of Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL)’s Google could take away a big chunk of its mainstay business.

Last week, PayPal announced plans to cut about 2,500 jobs, or 9% of its global workforce, as it streamlines its operations.

“2024 is going to be a transition year, focused on execution to position the business for long-term success,” Chriss said.

Meanwhile, analysts have focused on PayPal’s margins, which have underwhelmed investors in recent quarters.

The company’s unbranded businesses, including payments processing, have shown strong growth, helping offset weakness in its branded business such as Venmo, which faces intense competition.

Adjusted operating margin came in at 23.3% in the fourth quarter, expanding 39 basis points, from a year earlier.