California: Visa reported card-spending growth that was more robust than Wall Street expected as consumer demand for travel and dining out remained strong last quarter.
Payments volume climbed 9 per cent to $3.17 trillion in the fiscal third quarter ended June 30, San Francisco-based Visa said Tuesday in a statement. That beat the $3.14 trillion average estimate of analysts surveyed by Bloomberg.
Visa and rival Mastercard have gotten a boost from cardholders’ continued willingness to spend on travel and entertainment. US consumer confidence advanced to a multi-year high in July, aided by a strong job market and easing inflation, the Conference Board said earlier Tuesday.
“I’m certain that the travel momentum will continue,” Chief Financial Officer Vasant Prabhu, who also serves on the board of Delta Air Lines and is planning to step down from his post at Visa next month, said in a telephone interview. “Consumers have had a lot of pent-up demand for travel.”
Revenue in the period rose 12 per cent to $8.1 billion, beating the $8.06 billion that analysts predicted. Adjusted net income of $4.5 billion, or $2.16 a share, was 5 cents better than estimates.
Shares of Visa slipped 0.3 per cent to $238.06 in extended trading at 6:57 pm in New York. The stock had gained 15 per cent this year through the close of regular trading.
Last week, American Express said volume on its network increased 8 per cent for the three months through June, the weakest gain in more than two years. Purchase, New York-based Mastercard is scheduled to report results before US markets open on Thursday.
Visa reached new co-brand credit-card deals during the most recent quarter with Breeze Aviation Group and Allegiant Travel as well as Indian conglomerate Adani Group. The latter partnership will give the payments giant access to 400 million customers through Adani’s airports and online travel services, Visa CEO Ryan McInerney said in a conference call with analysts.
The better-than-expected financial results may assuage investors’ concerns that spending on Visa’s cards will taper off as central banks continue to raise interest rates.
“We don’t see a slowdown,” Prabhu said. “We see stability just about everywhere, and I think the consumer has stayed resilient just about everywhere, not just the US.”