Consumers swiped their Visa debit and credit cards more often, and ran up higher tabs, driving better-than-expected first-quarter results for the world's largest card processor.
Visa (V) earned $1.82 a share for the December-ending quarter, after backing out a one-time per-share tax gain of 11 cents. That was up 22% from a year ago, and 3 cents per share higher than the consensus estimate of analysts surveyed by Thomson Reuters.
Total operating revenue rose 12% to $2.85 billion, led by gains in service, data processing and international transactions.
The card king — it has about 2 billion in customers' wallets around the world — reaffirmed 2013 full-year guidance of low-double-digit revenue growth and high-teens growth in adjusted EPS.
It also approved a new $1.75 billion share repurchase program. That brings its total outstanding share repurchase authorization to $2.9 billion.
Shares fell 1% in late trading. Visa rose 0.8% to 160.82 in the regular stock market session.
Visa said payment volume grew 9% in the fiscal first quarter to $1.1 trillion on a constant dollar basis. It processed 14.2 billion transactions over its network, a 4% increase vs. a year ago. Both were slight accelerations from the prior quarter.
Visa makes its money on transaction fees.
"Our results include significant continued investments in our core business, accelerating international expansion and the deployment of next-generation payment solutions for the benefit of our financial institution and merchant partners," CEO Charlie Scharf said in a statement.
Visa and smaller rival MasterCard (MA) are both on the IBD 50 list of elite stocks. MasterCard modestly topped earnings forecasts in its Jan. 31 report.
Scharf said other card processors were the prime competitor. But the main focus is to convert a higher percentage of payments to electronic form.
"The enemy, first and foremost, is cash," he said.
Scharf, former head of JPMorgan Chase's (JPM) retail financial services division, took over at Visa in November.
Analysts asked him about Visa's relationship with such large banks. Scharf pointed to its V.me digital wallet services, which he said is now available to customers with cards issued by 12 of the top 25 banks.
"We have a great list of partners that are currently signed up for it," Scharf said in a call with analysts.
Visa and MasterCard shares both hit record highs last month as consumers appeared to emerge unscathed from the budget standoff in Washington. MasterCard briefly spiked to a new best after its earnings report.
- Investment & Company Information