Visa profit jumps on strong cost-cutting, meets expectations
BOSTON -- The world's largest electronic payment network on Wednesday reported net income of $729 million, or 97 cents a share, for the three months ended June 30. That's up from a profit of $422 million, or 51 cents a share, in the year-ago period.
Excluding one-time items such as the sale of an interest in a Brazilian venture, Visa's adjusted quarterly profit was $507 million, or 67 cents a share.
Analysts surveyed by Thomson Reuters expected a profit of 67 cents a share. Analysts' estimates typically exclude one-time items.
Visa's revenue rose 2% to nearly $1.65 billion, slightly above analysts' forecast of about $1.64 billion.
Visa, which has recently gone on a cost-cutting campaign, said operating expenses fell nearly 15% to $824 million in the latest quarter. Adjusted for one-time items, the decline in operating expenses was more modest, at 9%.
The reduced expenses boosted the company's profit margin. But that gain was partly offset by a 5% decline in payments volume, to $617 billion for the three months ended March 31, excluding the effects of currency fluctuations. Visa reports some operational results on a three-month lag.
U.S. payments volume fell 2.5% from the year-ago period. But, accounting for currency movements, payments volume continued to grow in all other regions globally. Other regions of the world are increasingly embracing credit and debit payments over cash and checks.
Total cards carrying the Visa brands rose 6% over a year ago, to more than 1.7 billion.
Visa earns revenue primarily from fees it charges to process payments made with credit and debit cards, which has enabled it to weather the recession better than banks that issue credit cards and make loans.
Service revenue rose 3% to $769 million in the latest quarter, based on payments volume in the prior quarter.
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