Visa’s 2Q earnings jump 21% as pandemic eases around the world
NEW YORK (AP) — Payments processing giant Visa’s profits rose 21% in the first three months of the year, fueled by a surge in spending on Visa’s namesake credit and debit card network. the company.
The San Francisco-based company announced Tuesday that it earned $3.65 billion, or $1.70 per share, in its second fiscal quarter that ended March 31. That figure was up from $3.03 billion, or $1.38 per share, in the same period a year earlier.
Its earnings adjusted to exclude one-time items were $1.79 per share. The results exceeded analysts’ expectations, which wanted Visa to earn $1.65 per share on an adjusted basis, according to FactSet.
Visa’s results were largely due to a significant increase in the amount of money and the number of transactions that passed through its payment network. The company processed $3.384 billion in payments on its network last quarter, up 17% from a year earlier. Visa earns a commission on every transaction that uses its network.
“While the geopolitical environment remains uncertain, we expect continued growth driven by a robust recovery in travel and through the establishment of traditional and new payment methods globally,” said Al Kelly, CEO and president of Visa, in a press release.
Shares of Visa rose more than 5% in after-hours trading after the earnings report. Visa shares are down about 7% for 2022, compared to the S&P 500’s 12.4% year-to-date decline.
The company has benefited in recent years from a global shift in consumer behavior towards digital payments, particularly during the pandemic. Consumers are buying more goods and services online, often requiring the use of a credit or debit card. Because Visa and its biggest competitor Mastercard dominate credit and debit card spending, this translated directly into their bottom line.
Visa reported a $60 million charge to its net income related to the closure of its operations in Russia. Like many global companies, Visa announced it was pulling out of Russia due to the Kremlin’s invasion of Ukraine.