Weaker estimates cast shadow over Visa’s profit beat

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(Reuters) – Visa Inc (V.N) reported a better-than-expected quarterly profit on Thursday, joining smaller rival Mastercard, as a solid holiday shopping season boosted transactions on its payment network. However, shares fell 1.52 percent in extended trading as Visa sees higher full-year expenses and slower revenue growth in the current quarter. “Our outlook for the fiscal second quarter net revenue growth remains a couple of points below the full year rate,” Chief Financial Officer Vasant Prabhu added. Net income rose to $2.52 billion in the first quarter ended Dec. 31 from $2.07 billion a year earlier, while earnings per Class A share rose to $1.07 from 86 cents. The payment processor recorded a gain of $1.13 billion related to the new U.S. tax law and a charge of $1.15 billion tied to the repatriation of funds held overseas. Excluding items, Visa earned $1.08 per share. Analysts on average expected 99 cents, according to Thomson Reuters I/B/E/S. Total operating revenue rose 9 percent to $4.86 billion, reflecting growth in payments volume and processed transactions. Operating expenses rose 12.8 percent to $1.54 billion and Visa said it expects expenses to rise in the second quarter as well. Payment volumes rose about 10 percent to $1.93 trillion, on a constant dollar basis, with the United States accounting for about 43.3 percent of the total. Cross-border volumes – the value of transactions made outside of the United States – increased 9 percent, on a similar measure. Visa said it would repurchase $7.5 billion of its stock and it has $9.1 billion of funds available for share buybacks. Earlier in the day, Mastercard (MA.N) reported a 20.2 percent jump in quarterly revenue. (This version of the story refiles to correct typographical error in headline to cast instead of casts.) Reporting by Diptendu Lahiri in Bengaluru; Editing by Anil D’SilvaOur Standards:The Thomson Reuters Trust Principles.
Source: Reuters