Visa Inc. (V.N) announced a better-than-anticipated second-quarter profit on Tuesday and relied on continuing payments industry growth as customers brace for a milder recession than projected. As a result, after-hours trade boosted San Francisco-based payments processors’ shares by 2.4%.
Card businesses avoided the economic slowdown last year thanks to a strong dollar and a travel boom, especially in China. As a result, executives had downplayed the economic uncertainty for several quarters. “Consumer payments remains a massive opportunity for Visa,” CEO Ryan McInerney said on a post-earnings teleconference.
“There is a very long runway for growth in this business,” he continued. Payment volumes jumped 10% in the three months ending March, while cross-border volume excluding Europe, a measure of Visa’s international transaction income, rose 32%.
A year earlier, payment volumes rose 17% while cross-border traffic, excluding Europe, rose 47%. “While the current environment still feels uncertain, we have contingency plans ready and are prepared to take action as needed,” McInerney said.
After the banking crisis, financial circumstances tightened, causing analysts to worry about families and small enterprises, even if the labor market remains strong.
Transactions grew 12% in the quarter, down from 19% a year earlier. Net sales rose 11%, the smallest in eight quarters.
Visa’s results mirror American Express Inc (AXP.N), which stockpiled $1.1 billion to cushion future defaults and spent more on advertising, missing Wall Street projections on Thursday.
According to Refinitiv IBES, Visa earned $2.09 per share on an adjusted basis in the quarter that ended in March, above analysts’ projections of $1.99.
