Visa gets boost from non-U.S. consumers

Visa Inc., the world’s largest payments network, got a boost from consumers outside the U.S. even as total spending on its cards missed analysts’ estimates.

Growth in overseas spending on Visa cards bounced in the fiscal third quarter, rising 7%, the company announced Tuesday. That beat the 6.65% gain that analysts expected.

Key Insights Investors keep a close eye on growth in crossborder spending, which produces higher fees for San Francisco-based Visa. Total spending on the firm’s cards climbed to $2.23 trillion, missing the $2.28 trillion average of 11 analyst estimates compiled by Bloomberg.

The company had to spend more to lure retailers and banks and help drive consumer spending to its network. Visa set aside $1.55 billion on client incentives in the fiscal third quarter, a 12% increase, compared with the $1.63 billion average of analyst estimates.

The firm continues to expect revenue to climb by a percentage in the “low double digits,” while profit should climb by a percentage in the “low twenties.” Operating expenses in the firm’s fiscal 2019 should increase in the “low single digits.”

Visa fell as low as $176.52 in extended trading in New York before recovering most of the loss. The firm’s shares have gained 37% this year, outpacing the 32% advance of the 67-company S&P 500 Information Technology Index.

“Visa had an excellent third quarter in terms of accelerating business growth while advancing our strategy through acquisitions, investments and partnerships,” Chief Executive Officer Al Kelly said in the statement.