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Visa profit beats Street on increased use of cards

Visa credit cards are displayed in Washington October 27, 2009. REUTERS/Jason Reed

(Reuters) - Visa Inc (NYS:V), the world's largest credit and debit card company, reported a better-than-expected 9 percent rise in quarterly profit as more people used cards instead of cash to make payments.

Visa shares rose 3.2 percent in trading before the bell.

The company also said it would continue to work to make card payments more secure as concerns mount over the safety of debit and credit cards.

Last month Target Corp (TGT.N), the third-largest U.S. retailer, said about 40 million credit card records and 70 million other records containing data on its customers were stolen in a security breach.

"Visa is committed to ensuring our network operates at the highest level of security available and will continue to move the industry towards the adoption of new safeguards," Chief Executive Charlie Scharf said on Thursday.

One of the safeguards that Visa and MasterCard Inc (MA) have been pushing for is to get banks to issue cards with an embedded chip to hold information, rather than rely on the easily-copied magnetic strips that are widely used now.

Net income attributable to Visa rose 9 percent to $1.41 billion, or $2.20 per Class A share, in the first quarter from $1.29 billion, or $1.93, a year earlier.

Total operating revenue increased 11 percent to $3.16 billion in the quarter ended December 31.

Analysts on average had expected earnings of $2.16 per share on revenue of $3.13 billion, according to Thomson Reuters


Foster City, California-based Visa said total volume grew about 7 percent to $1.84 trillion, helped by a strong holiday shopping in the United States.

Visa shares were up 3.2 percent at $224.00 before the bell.

Shares of Visa, a component of the Dow Jones industrial average (.DJI), have gained about 44 percent last year, outperforming the 27 percent rise in the broader Dow Jones index.

(Reporting by Tanya Agrawal in Bangalore; Editing by Don Sebastian and Savio D'Souza)