Visa 2Q prof­its fall, but re­sults still beat ex­pec­ta­tions

The Columbus Dispatch - - Market Summary -

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

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.

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