Visa profit beats estimates as transaction volumes rose on higher festive spending
Visa’s total payments volume and the number of processed transactions rose 11% each.
Payments network Visa's quarterly profit beat estimates on Wednesday, as consumers shopped more during the festive year-end period, giving the network more transactions to process.
Visa’s total payments volume and the number of processed transactions rose 11.0% each, the firm said. The United States was able to enjoy the strongest holiday season spending in 6 years, supported by the stronger economy last year.
Operating expenses rose by 16.5% to US$1.79 billion in the quarter as the firm has been ramping up on spending to partner with consumer brands, hotels and airport lounges, and payment processors to provide incentives to subscribers.
Although expenses rose, the marketing strategy helped to boost payment volumes and reach out to new customers, therefore also supporting payment volumes.
Visa’s net income rose to US$2.98 billion, or US$1.30 per Class A share in the fiscal first quarter, higher than US$2.52 billion, or US$1.07 cents per Class A share a year ago.
The firm’s earnings per share was at US$1.30, better than analyst’s estimates of US$1.25. Net revenue was up by 13.2%, to US$5.51 billion.
Shares of Visa rose to close the day’s trading higher by 1.95%, or US$2.63, at US$137.60.
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