The Canadian Press - ONLINE EDITION

Growth in payments volume helps drive Visa's 3Q profit higher; outlook misses Street view

  • Print

FOSTER CITY, Calif. - Visa Inc. said Thursday that its profit climbed 11 per cent in its fiscal third quarter versus a year earlier, aided by solid growth in payments volume, service revenue and transactions.

The payments processor's latest financial results beat or matched Wall Street expectations. But its stock slid 3 per cent in extended trading after the company tempered its earnings outlook for the year, citing issues including a stronger U.S. dollar and slow growth in cross-border transactions, or when someone uses a Visa card outside the country where it was issued.

In a conference call with Wall Street analysts, Visa's Chief Financial Officer Byron Pollitt noted that the company is guardedly optimistic that the slowing of cross-border volume growth has bottomed.

"In short, we are approaching 2015 bullish on the long term but cautious in the short-term," Pollitt said. "While we expect U.S. and international payment volume growth to remain healthy, we have not yet seen acceleration in global economic growth."

Foster City, California-based Visa is the world's largest processor of debit and credit card payments. As such, it benefits from heightened consumer spending, and its results are closely watched because they can be a window into the buying habits and financial health of consumers.

In the April-June quarter, the volume of credit and debit card transactions made on Visa's network grew 6 per cent to $1.84 trillion. Of that, $748 billion came from U.S. transactions, a gain of about 9 per cent.

Payments volume, meanwhile, grew 11 per cent to $1.2 trillion, while cross-border transaction volume grew 7 per cent.

In all, the number of transactions processed by the company increased 11 per cent to 16.7 billion.

Visa's transactions growth echoes data that show increased spending by consumers in recent months as unemployment declines.

Employers are hiring at a healthy pace, knocking the unemployment rate down to 6.1 per cent, the lowest in nearly six years. That makes Americans more confident to spend. Consumer spending at retail stores picked up an average of 0.5 per cent in the April-June quarter after a severe winter weighed on sales earlier this year.

All told, Visa reported that its profit increased to $1.36 billion, or $2.17 per share, from $1.23 billion, or $1.88 per share, in the same quarter a year earlier. The average per-share estimate of analysts surveyed by Zacks Investment Research was for earnings of $2.09.

Revenue rose 5.1 per cent to $3.16 billion from $3 billion in the same quarter a year earlier, matching Wall Street's forecasts.

Visa shares ended regular trading up $1.54 at $222.74. The stock slid $6.74 to $216 in extended trading following the release of the earnings report.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Gary Lawless & Ed Tait try not to bleeping cry over the woesome Jets

View more like this

Photo Store Gallery

  • horse in sunset - marc gallant
  • A Canada goose protects her nest full of eggs Monday on campus at the University of Manitoba- Standup photo- Apr 30, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

Will you get out and vote for a new mayor and council?

View Results

View Related Story

Ads by Google