Visa profit jumps on strong holiday spending

AP News
Posted: Feb 01, 2018 6:08 PM
Visa profit jumps on strong holiday spending

Visa Inc.'s profit jumped 22 percent in its fiscal first quarter, helped by strong holiday spending and online shopping in the U.S.

The San Francisco-based payment processor reported after the stock market closed Thursday that it earned $2.52 billion, or $1.07 per share, for the quarter that ended December 31. That's up from $2.07 billion, or 86 cents per share, earned in the same quarter of the prior year.

Excluding special items related to tax overhaul, the company earned $1.08 per share. That far exceeded the 98 cents per share that analysts polled by FactSet had anticipated.

Visa's total revenue increased nearly 9 percent to $4.86 billion, also exceeding expectations. Payments volume increased 10 percent over the prior year. Its processed transactions increased 12 percent.

The amount processed on Visa's network is closely watched figure because the company charges a fee to a merchant each time a customer uses their Visa credit or debit card.

Visa, like many companies, was impacted by the recent changes to tax law. The company said it saw a roughly $1.13 billion benefit from the new, lower tax rate and a $1.15 billion charge for a transition tax on certain foreign earnings. The law requires a transition tax on previously untaxed deferred foreign earnings.

CEO Alfred Kelly Jr. said that the company is "evaluating ways to further invest in our business, our people and our communities" following the passage of the tax law.

The company also said its board authorized a new $7.5 billion share repurchase plan and increased its quarterly dividend.

Still, Visa's stock slipped about 1 percent in extended trading on concerns about increased spending forecast for the year.