Spending

Visa profit beats quarterly estimates on increased travel and online spending

A Visa credit card is seen on a computer keyboard in this illustration taken September 6, 2017. REUTERS/Philippe Wojazer/Illustration

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NEW YORK, Jan 27 (Reuters) – Visa Inc (VN) beat Wall Street’s quarterly estimates on Thursday as increased international travel and e-commerce led to higher spending volumes.

While travel spending has stalled since late December due to the Omicron variant of the coronavirus, Visa executives said they believe the recovery will pick up and net revenue will rise in the fiscal second quarter of this year.

“The upside is going to come from the continued recovery of travel and the return of affluent customers in the spending mix to pre-pandemic levels,” Visa Chairman and CEO Alfred Kelly said during the meeting. a call with analysts.

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The world’s largest payments processor said transactions rose 21% to $47.6 billion in the quarter from a year earlier.

Cross-border volumes increased by 40%, marked by a surge in travel between September and November when the US border and most borders in Europe reopened.

Visa chief financial officer Vasant Prabhu said that even as countries reinstate border closures this year due to new variants of COVID-19, spending appears to be rebounding quickly when consumers can travel.

“(Opening borders) can have a huge and immediate impact,” Prabhu said. “Our assumption is consistent improvement throughout the year.”

Shares rose as much as 2.5% in after-hours trading following the company’s results.

Net revenue reached $7.1 billion in the quarter ended December 31, an increase of 24% over the prior year.

Visa reported earnings of $3.9 billion, or $1.81 per share.

Analysts had on average estimated net earnings of $1.70 per share, according to IBES data from Refinitiv.

Rival card companies Mastercard Inc and American Express Co also said they beat quarterly profit estimates this week, fueled by the recovery in consumer spending on international travel, restaurants and shopping. . Read more

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Reporting by Mehnaz Yasmin in Bengaluru and Elizabeth Dilts Marshall in New York; Editing by Diane Craft and Matthew Lewis

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