Visa’s third-quarter profit beats expectations
NEW YORK » Payment processing giant Visa said its fiscal third-quarter profit rose sharply from a year earlier, following its purchase of Visa Europe.
The San Francisco-based company earned $2.06 billion in the period ending June 30, or 87 cents a share, compared with a profit of $412 million, or 12 cents per share, in the same period a year ago. Last year’s results included a onetime restructuring charge tied into Visa’s purchase and integration of Visa Europe.
The results beat the expectation of analysts who according to FactSet had been looking for Visa to earn 81 cents a share.
Visa has been benefiting from its $23 billion purchase of Visa Europe in June 2016, which brought all operators of the Visa payment network under one company. It also was helped by replacing American Express as the payment processor for Costco, the nation’s largest warehouse store chain.
Visa processed $1.86 trillion on its network in the quarter, the company said, which is up 38 percent from a year earlier. Payments processed in the U.S., which is Visa’s largest market, were up 12 percent. Visa does not issue credit or debit cards on its own and instead has partnerships with banks to issue cards that will run on Visa’s payment network. The company then charges a fee to merchants for each transaction processed on the network.
The company’s fortunes are directly tied into how much consumers spend on its network versus using cash, an American Express card or MasterCard.
“We continue to see strong consumer confidence, which has driven strong spending growth,” said Alfred Kelly, Visa’s CEO, in a call with investors.
Visa is also the network used on a recent popular entrant into the credit card industry: JPMorgan Chase’s Sapphire Reserve Card.