By Angela Chen
Visa Inc. on Thursday said revenue rose 7.8% in its fiscal
second quarter as payment volumes increased 11%.
Shares of the company were up less than 1% in aftermarket
trading.
Chief Executive Charlie Scharf said that the company was
performing well even as "the negative impacts from the
strengthening of the U.S. dollar and lower gasoline prices
continued to exert pressure on revenue growth."
Based in Foster City, Calif., Visa is the largest U.S. payments
network. Visa and competitor MasterCard Inc. don't issue cards or
set interest rates, but they charge fees to financial institutions
for transactions that travel over their networks.
The company's digital efforts have included the launch of Visa
Digital Solutions, an initiative geared toward secure payments
using mobile devices. Visa said in September it planned to create
2,000 full-time technology roles and open a new technology center
in India. Visa and others have supported Apple Inc.'s Apple Pay
service.
Last month, Costco Wholesale Corp. said Visa, along with
Citigroup Inc., won the sought-after contract for its credit-card
business, replacing American Express Co., in a move that will
significantly expand the kind of plastic that is accepted at the
warehouse giant. Starting on April 1, 2016, Visa will be the only
brand accepted at Costco.
In the latest quarter, payment volume grew 11% to $1.2 trillion
in constant currency. Total transactions also grew 11%, to $17
billion. Data processing revenue grew 9% to $1.3 billion, and
international revenue grew 11% to $964 million. Other revenues,
such as the Visa Europe licensing fees, increased 12% to $204
million.
The company also repurchased 16.2 million shares of class A
stock in the fiscal second quarter. To date, the company has
repurchased 28.6 million shares, and has $3.8 billion of remaining
funds.
Operating expenses grew 1% to $1.1 billion due mostly to
increased personnel, and offset by the absence of large marketing
events such as the 2014 Olympics in Sochi, Russia, or the FIFA
World Cup.
For the period ended in March, Visa reported a profit of $1.55
billion, or 63 cents a share, compared with $1.6 billion, or 63
cents a share, in the same period a year earlier.
Revenue rose to $3.41 billion from $3.16 billion.
Analysts polled by Thomson Reuters projected earnings of 62
cents a share on revenue of $3.34 billion.
The company reaffirmed its full-year guidance.
Write to Angela Chen at angela.chen@dowjones.com
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