NEW YORK (AP) — Payment processing giant Visa Inc. said Thursday that its profits dropped slightly in the first three months of the year, hurt by the strengthening dollar and lower gas prices.
But its results still topped Wall Street expectations.
The Foster City, California-based company processed $1.24 trillion in payments on its network in the quarter, up 11 percent from a year ago. Payment volume is a closely watched metric for payment processors like Visa and MasterCard because they charge a small fee for every transaction processed on their network.
Like other global companies, Visa's results were impacted by the strong U.S. dollar because it makes goods purchased abroad cheaper when their sales are translated into dollars. Visa and MasterCard, whose job is entirely related to payment processing, are particularly exposed to currency fluctuations. Visa said the dollar reduced revenue growth by 2.5 percentage points.
Lower gas prices also impacted Visa's results. Because it takes a small fee of each transaction, consumers spending less on gas translates directly into a hit to Visa's bottom line. Visa executives, in a conference call with investors, said lower gas prices trimmed 3 percentage points off U.S. payment growth.
The world's biggest payment network says it earned $1.55 billion in the period, down 3 percent from $1.6 billion in the same period a year earlier. That amounted to 63 cents a share in the latest quarter. Revenue rose almost 8 percent to $3.41 billion.
Analysts surveyed by FactSet expected Visa to earn 62 cents a share on $3.34 billion in revenue in its fiscal second quarter.
Visa shares were down 1.6 percent in after-market trading to $65.01.