Visa 3Q earnings jump 25 percent, beat estimates
Jul. 23, 2015
NEW YORK (AP) — Visa Inc. said its fiscal third-quarter profit jumped 25 percent, helped by a double-digit rise in payments processed on its network. However Visa executives emphasize they are not seeing as robust U.S. consumer spending as they hoped.
The San Francisco-based payment processing company earned $1.7 billion after payments to preferred shareholders, compared to a profit of $1.36 billion a year earlier. On a per share basis, the bank earned 69 cents per Class A share, compared with 54 cents per share a year earlier.
The results easily topped estimates. Analysts surveyed by FactSet expected earnings of 58 cents per share.
Net revenue at Visa totaled $3.52 billion, up from $3.15 billion a year earlier.
Customers spent $1.2 trillion on Visa's network, up 11 percent from a year ago, in the latest quarter. Visa takes a small percentage of every transaction processed on its network as a fee, which is almost always paid by the merchants who accept Visa credit or debit cards. Visa had 2.42 billion cards issued on Visa's network, up 7 percent from a year earlier.
In the U.S., where more than half of Visa card transactions are processed, payment volume rose 8.7 percent versus a year ago.
But Visa CEO Charles Scharf said in a conference call with investors that, despite the payment growth in U.S., the company had seen "very little improvement with the U.S. consumer in our numbers thus far, if any."
"There are positive signs in employment and housing and lower gas prices should help, but we'll have to wait and see," Scharf added.
Due to its involvement with millions of credit and debit card transactions each day, Visa is heavily exposed to swings in U.S. consumer spending behavior. Investors often look to Visa as a metric to measure how the U.S. consumer is doing.
Separately, Scharf confirmed that Visa remains in in early merger talks with Visa Europe, a separate payment processing company that also runs a payment network in Europe. The companies are not ready to announce a deal, and would likely come later this year.
Shares of Visa jumped $5.02, or 7 percent, to $76.77 in after-market trading Thursday.