AAPL Apple Inc

By Josh Beckerman 

Visa Inc.'s quarterly earnings fell 76%, hurt by charges tied to the acquisition of its European operations, while its revenue and payments volume rose.

"While little has changed in the global economic environment, and cross-border commerce continues to be challenged by a strong U.S. dollar, domestic consumer spend across the globe remains strong and resilient," Chief Executive Charlie Scharf said.

The credit-card issuer also added $5 billion to its stock buyback plan and unveiled a digital payment alliance with PayPal Holdings Inc. intended to make it easier for PayPal customers to pay with Visa cards.

Like rival MasterCard Inc., Visa is a payments network that processes credit-card and debit-card transactions. It doesn't set interest rates on cards or charge fees to consumers.

Visa has stepped up its digital efforts as consumers migrate to electronic payments. Visa and others have supported Apple Inc.'s Apple Pay service, and Visa invested in mobile-payments startup Square Inc.

Under Visa's deal with PayPal, consumers will be able to instantly withdraw and move money from their PayPal and Venmo accounts to their bank account via Visa debit cards. Furthermore, PayPal won't encourage Visa cardholders to link their PayPal account to a checking account.

The deal is expected to increase the number of transactions made on Visa-branded cards.

In all, Visa reported a profit of $412 million, or 17 cents per Class A share, for its fiscal third quarter ended June 30, down from $1.7 billion, or 69 cents per Class A share, a year earlier. Excluding one-time items related to its acquisition of Visa Europe Ltd., earnings were 69 cents a share.

Revenue rose 3.2% to $3.63 billion, up 6% on a constant-dollar basis, driven by improved payments volume.

Analysts polled by Thomson Reuters projected earnings of 66 cents a share on revenue of $3.65 billion.

Payment volume increased 10% on a constant-dollar basis to $1.3 trillion, while the number of processed transactions rose 10% to 19.8 billion.

"The consumer has remained remarkably steadfast in the face of significant global instability," said Mr. Scharf.

Cross-border volume rose 5% on a constant-dollar basis.

Operating expenses, excluding items such as the Visa Europe purchase, fell 7% to $1.17 billion, reflecting lower personnel and marketing costs.

Visa purchased the European operations in June, a deal initially valued at up to 21.2 billion euros ($23.4 billion) that was designed to bring its global operations under one roof.

The company has been facing increasingly adversarial relationships with retailers over issues including fees and the transformation to chip cards in the U.S.

In June, a U.S. appeals court threw out a record-setting $7.25 billion antitrust settlement between Visa and MasterCard and millions of retailers after determining that some merchants weren't adequately represented.

Meanwhile, Wal-Mart Stores began blocking the use of Visa credit cards at three Canadian stores this month in a fee dispute, while another Wal-Mart conflict involves Visa's complaints that the retailer secretly configured payment terminals so that only personal identification numbers could be used.

Shares of the company, which reiterated its earnings and revenue guidance for the year, about 0.2% in after-hours trading.

Robin Sidel contributed to this article.

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

July 21, 2016 19:15 ET (23:15 GMT)

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