Visa 2Q profits fall, but results still beat expectations
Payment processing giant Visa said its profit dropped 75 percent in the fiscal second quarter from a year ago, largely due to the costs of integrating its recently acquired Visa Europe into the larger company.
The San Francisco-based company said Thursday it earned $430 million, down from $1.7 billion in the same period a year earlier. On a per-share basis, Visa earned 18 cents a share versus 71 cents a share a year ago.
Visa had two significant one-time charges on its books related to the legal organization of the company to include Visa Europe, which Visa Inc. purchased last year. Excluding those one-time items, Visa had an adjusted profit of $2.1 billion, or 86 cents per share, which beat analysts’ expectations.
The company continues to benefit from the increased adoption of plastic as a method of payment across the globe. All major geographic divisions of Visa Revenue Net income Earnings per share
The first-quarter results represent “a solid start” to 2017, said Mike Brooks, chairman and CEO of the Nelsonville-based footwear and apparel company. The company more than doubled its sales in its military segment to a quarterly record $12 million. At the same time, sales in the wholesale segment have stabilized, particularly in work and Western, Rocky Brands’ two largest categories. reported greater usage of Visa’s products in the quarter. The amount processed on Visa’s network is closely watched by investors since the company charges a fee to a merchant each time a customer uses a Visa credit or debit card.
Visa processed $1.73 trillion on its credit and debit card network in the quarter, up 37 percent from a year earlier, but that increase includes the processing business of Visa Europe as well. In the U.S., where Visa does most of its business, the company processed $775 billion on its network in the quarter, up roughly 12 percent from a year earlier. Visa last year became the credit card processing company for Costco, taking that business away from American Express, which has helped it expand its total payment processing as well.
Verizon, the once-unstoppable cellphone leader in the U.S., lost key wireless customers for the first time, even as it brought back unlimited data plans to counter smaller rivals.
In the first three months of the year, Verizon lost 307,000 wireless subscribers who are billed each month, the more lucrative kind of wireless customer. MoffettNathanson Research says it’s the first-ever loss in that category, which covers phones, tablets, smartwatches and other connections. For cellphones alone, Verizon lost 289,000 customers. Verizon said it would have lost even more customers if it hadn’t launched the unlimited plan.
Total wireless revenue fell 5 percent to $20.9 billion, because of fewer customers and less money coming from the fees Verizon charges when customers go over their data limits. Unlimited plans don’t have those fees.
Growth in wireless subscribers has slowed now that most Americans have a cellphone. Instead, companies have been poaching customers from each other with lower prices and offers to pay people to switch.