Visa profit beats estimate as payment volumes rebound

(Reuters) – Visa Inc beat Wall Street estimates for quarterly profit on Thursday, as a surge in online spending helped drive a recovery in payment volumes from the coronavirus-induced slump.

FILE PHOTO: Visa credit cards are seen in this picture illustration taken June 9, 2016. REUTERS/Maxim Zmeyev/Illustration

The world’s largest payment processor said total spending rose 5% on a constant dollar basis from a year earlier, after dropping 10% in the previous quarter, as customers staying at home due to the health crisis shopped more on the web.

“We saw sustained strength of debit and eCommerce volumes as well as resilient domestic spending in most countries,” Chief Executive Officer Alfred Kelly Jr said.

Visa’s shares were up 1.2% in extended trading as the company said the number of processed transactions rose 4% and that it approved a new $8 billion share buyback program.

But cross-border volume slumped 21% as the pandemic continued to hurt travel demand, with volumes excluding transactions within Europe crashing 33%.

The resurgence of infections in several countries led to border closures, which mainly impacted card-present spending, Visa said. A card-present transaction is one in which a customer physically swipes a card to make a payment.

Visa also did not provide a forecast for full-year 2021 due to the COVID-19 crisis.

However, its peers Mastercard Inc and American Express Co said earlier they expect a near-term uptick in business as easing lockdowns and improved vaccination efforts boost travel.

Visa reported a net income of 1.42 per Class A share for the first quarter ended Dec. 31, compared with analysts’ estimates of $1.28 per share, according to IBES data from Refinitiv.

The company’s net revenue fell 6% to $5.69 billion.

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