Visa Inc. outperformed third-quarter tax earnings and revenue expectations on Tuesday, but the company experienced a decline in volume as the COVID-19 crisis continued to slow spending growth, especially in the travel category.
Share V,
they were out of 2% in after-hours trading.
The company posted net income of $ 2.4 billion, or $ 1.07 per share, below $ 3.1 billion, or $ 1.37 per share, in the prior-year quarter. Adjusted earnings came in at $ 1.06 per share, while analysts surveyed by FactSet expected $ 1.03 per share.
Visa’s revenue fell to $ 4.84 billion from $ 5.84 billion, while the FactSet consensus demanded $ 4.82 billion. Payment volume fell 10% during the quarter, while cross-border volume decreased 37%. Excluding transactions within Europe, cross-border volume fell 47%.
The company said in its earnings report that it saw spending improve in each month of the fiscal third quarter as more countries began easing coronavirus-related restrictions on economic activity. Payment volume “significantly improved” in the US as the quarter progressed, boosting current card spending as e-commerce spending “remained consistently high,” supporting travel-related spending .
Processed transactions fell 13% in the quarter worldwide. Visa said this metric has slowed volume growth “as the spending mix moved away from smaller transactions.” Cross-border volume “has only marginally improved during the quarter” due to continued travel restrictions, a key source of this type of spending activity.
Management does not offer a full-year perspective due to uncertainties surrounding COVID-19.
Visa kicked off a busy week of payment earnings, with PayPal Holdings Inc. PYPL,
configured to report after the closing bell on Wednesday and Mastercard Inc. MA,
following on Thursday morning.
Visa shares have gained 15% in the past three months as the DIA Jones Industrial Average DJIA,
, of which Visa is a component, has increased by around 9%.
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