Visa exceed expecations in latest quarter
Visa beat Wall Street’s expectations for the latest quarter as it sought out business overseas.
The payments processing company made $1.7bn (€1.3bn) for the fourth fiscal quarter, which covered July through September, or $2.47 (€1.90) per share.
That was nearly double the $880m (€616m), or $1.27 (€0.98), that it made in the same period a year ago.
After adjusting for one-time items, earnings were $1.54 (€1.18). That beat the predictions of analysts polled by FactSet, who had expected $1.50 (€1.15).
Revenue was $2.73bn (€2.1bn) for the quarter, up 15 %. That was also better than the $2.68bn (€2.06bn) that analysts had predicted.
Visa makes money by processing card transactions. Its results provide insight into how consumers are spending.
Revenue from data processing, international transactions and service were all up. Volume for all credit and debit use grew the most in Asia Pacific and the area covering Central Europe, the Middle East and Africa. It was only slightly higher in the US.
Visa has been focusing its sights on international expansion, especially in emerging market countries where the percentage of credit and debit card usage is very low.
Earlier on Wednesday, rival MasterCard also reported higher profit and revenue, fuelled by the overseas business.
Unlike the banking industry, Visa did not cut back on expenses. The company spent more on personnel, marketing, administration and other professional services.
For the full year, Visa earned $2.1bn (€1.6bn), down 41 % from a year ago.
Earnings were hurt in the third fiscal quarter because Visa and other credit card processors had to set aside money to settle a long-standing class-action lawsuit brought by retailers.
MasterCard, Visa and major banks have agreed to pay retailers $7.25bn (€5.58bn) after the retailers accused them of fixing the fees that retailers have to pay whenever customers use credit cards.
Despite pushback from some large retailers, the deal is expected to gain court approval in the coming months.
Revenue for the full year was $10.4bn (€8bn), up 13 % over the year.
Visa’s stock rose about 1.5% in after-hours trading, up $2.15 US dollars (€1.65) to $140.91 (€108.6).
