Visa Earnings Beat Street Forecasts Amid Spending, Travel Boom

Visa  (V) – Get Free Report posted better-than-expected third quarter earnings Tuesday, while holdings its dividend in place, as the world’s biggest credit card company and payments company continues to benefit from the ongoing boom in domestic and international travel as well as resilient consumer spending.

Dow component Visa earned $2.11 per share over the three months ending in June, the group’s fiscal third quarter, topping the Street consensus forecast of $2.11, per share, as group revenues jumped 11.3% to a Street-beating $8.1 billion.

Cross border spending volume was up 17%, Visa said, with payments volume up 10% on a constant-currency basis.

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“We reported another quarter of strong results, reflecting stable business trends. Consumer spending remained resilient, driving growth in payments volume and processed transactions,” said CEO Ryan McInerney. “Cross-border volume continued to be a tailwind, fueled by travel growth from the ongoing recovery and summer tourism.”

“We are focused on accelerating our growth across consumer payments, new flows and value added services by investing in our brand, innovation, capabilities, people and clients so that we remain at the center of money movement for years to come,” he added. 

Visa shares, a Dow component, were marked 0.55% higher in after-hours trading immediately following the earnings release to indicate a Wednesday opening bell price of $240.00 each.

Domestic travel has been testing 2019 levels for much of the first half of the year, according to The Transportation Security Administration, which said earlier this month that its screened more than 11.3 million passengers over the five-day period that ended on July 5. 

That’s a level that represents around 93% of the volumes recorded over the same period in 2019. The recent seven-day average, in fact, shows total TSA traveler throughput running 0.7% ahead of 2019 levels. 

Last week, American Express  (AXP) – Get Free Report missed Street revenue forecasts and set aside a much higher amount of cash to cover potential bad consumer debts, clouding a stronger-than-expected second quarter earnings report.

American Express said earnings for the three months ending in June came in at $2.89 per share, up 9.31% from the same period last year and 8 cents shy of the Street consensus forecast of $2.81 per share.

Group revenues, American Express said, rose 12.3% to $15.05 billion, a company record that fell shy of analysts’ estimates of a $15.48 billion tally. Total network volumes were up 8% to $426.6 billion, an all-time high.

The company also said credit provisions rose nearly three-fold from last year, to $1.198 billion, while expenses were up 7% to $11.1 billion.

Looking into the second half of the year, American Express confirmed that it sees group revenues rising by between 15% and 17%, with earnings in the region of $11.00 to $11.40 per share. 

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