Visa Q1 Profit Rises, Tops View - Update

(RTTNews) - Visa Inc. (V) on Thursday reported an increase in profit for the first quarter, as customers spent more using its cards, with earnings trumping Wall Street expectations.

Foster City, California-based Visa's first-quarter profit rose to $1.94 billion or $0.80 per class A share from $1.57 billion or $0.63 per share a year ago.

Excluding an adjustment of the revaluation of its Visa Europe put option, adjusted earnings were $1.69 billion or $0.69 per share. On average, 32 analysts polled by Thomson Reuters expected earnings of $0.68 per share. Analysts' estimates typically exclude one-time items.

Visa, the world's largest credit and debit card company, said revenues for the first quarter grew 5 percent to $3.57 billion from $3.38 billion last year. Analysts had a consensus revenue estimate of $3.62 billion.

Revenue growth was driven by growth in service, data processing and international transaction revenues, the company said.

"We continue to be pleased with our financial performance given the uneven global economy and the ongoing negative effects of the strong U.S. dollar. While we continue to see relatively strong payments volume growth, these factors have meaningfully reduced our cross-border volume and revenue growth," said CEO Charlie Scharf.

Visa's first-quarter service revenues - based on payments volume in the prior quarter - rose 7 percent to $1.6 billion. Data processing revenues for the quarter increased 7 percent to $1.5 billion, while international transaction revenues climbed 6 percent to $1.0 billion.

Payments volume growth, on a constant dollar basis, for the three months ended September 30, 2015, on which fiscal first quarter service revenue is recognized, was 12 percent over the prior year at $1.3 trillion. Visa processed 19 billion transactions in the quarter, up 8 percent from last year.

Visa in November said it will buy its former subsidiary Visa Europe Ltd., in a deal worth $22 billion.

Looking forward to the the full year 2016, Visa expects adjusted earnings growth in the low-end of the mid-teens range and revenue growth of high single-digit to low double-digit range on a constant dollar basis.

V closed Thursday's trading at $69.33, down $1.58 or 2.23%, on the NYSE. The stock, however, gained $1.67 or 2.41% in the after-hours trade.