Visa,
the world’s biggest payments network, reported December quarter results that beat expectations and demonstrated consumer resilience. It reiterated its revenue and profit per-share forecast for this fiscal year.
Fiscal first-quarter gains in revenue and profit were “driven by relatively stable growth in overall payments volume and processed transactions, plus strong growth in cross-border volume,” CEO Ryan McInerney said. “Looking ahead, we continue to see significant opportunity across consumer payments, new flows, and value added services.”
Visa reported fiscal first quarter adjusted earnings of $2.41 a share and revenue of $8.6 billion, up more than 9% from a year earlier. Analysts expected Visa to report December quarter earnings of $2.34 a share and revenue of $8.5 billion.
Shares fell 2.9% in after-hours trading. They are up 4.7% so far this year and 21% in the past 12 months.
The payments company is benefiting from the same economic forces that have driven U.S. growth. Retail sales in December alone rose 0.6%, higher than expected for the crucial holiday sales month. And earlier Thursday, the first reading on economic output for the last three months of 2023 showed a better-than-expected 3.3% annualized gain.
Consumer spending has been a highlight of the U.S. economy in recent months, despite elevated interest rates. Consumer sentiment at the beginning of January, as tracked by the University of Michigan, jumped to its highest reading since July 2021.
Visa said payments volume in its fiscal first quarter, which covers the holiday shopping season, rose 8%, while cross-border volume rose 16%. Total processed transactions for the December quarter rose 9% to 57.5 billion.
Visa recently completed the acquisition of Pismo, a cloud processing and banking platform.
It said it expects second-quarter net revenue growth of “upper-mid to high-single digits” and growth in adjusted profit per share in the “high-teens.”
Surging summer travel and spending abroad helped boost Visa’s September quarter results, with cross-border volume rising 16% and overall payments volume rising 9% for the period. The company then cited resilient consumer spending and a continued recovery in overseas travel after the pandemic.
In October, management guided analysts to “high single-digit to low double-digit” revenue growth in percent terms and “low-teens” adjusted earnings-per-share growth in the full year 2024. It also announced plans to buy $25 billion of its stock.
On Thursday, Visa’s 2024 guidance for revenue growth was “low double digit” and its adjusted EPS growth for the year is expected to be “low-teens.”
Write to Liz Moyer at liz.moyer@barrons.com
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