Visa tops profit estimates on higher consumer spending
Strategas Research Partners CEO Jason Trennert provides insight into the earnings season so far.
Visa Inc, the world’s largest payments network, topped analysts’ estimates for third-quarter profit on Wednesday, as an expanding U.S. economy encouraged more people to spend using their credit and debit cards.
Total payments volume rose 11 percent to $2.10 trillion, on a constant dollar basis, with the United States - its largest market - comprising about 44 percent of the total.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose in the most recent quarter in an economy that is expected to have grown at its fastest annualized rate in three years.
Cross-border volumes - the value of transactions made outside the United States - saw a 11 percent growth in the quarter also on a constant currency basis.
Visa’s strong results reflect robust quarterly growth in credit card businesses of large U.S. banks, including JPMorgan Chase & Co and Citigroup Inc.
Visa's net income rose to $2.33 billion, or $1 per Class A share, in the third quarter ended June 30 from $2.06 billion, or 86 cents per Class A share, a year earlier.
On an adjusted basis, the company earned $1.20 per share, beating analysts’ average estimate of $1.09, according to Thomson Reuters I/B/E/S.
Net operating revenue rose 15 percent to $5.24 billion.