V Visa Inc

By Maria Armental 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 31, 2020).

Visa Inc. reported record quarterly profit and processed more than $3 trillion in transactions, a record for the quarter, driving a 10% revenue growth.

Still, revenue and net income fell slightly short of Wall Street projections, according to FactSet, even as per-share profit matched expectations.

Shares, which have been trading near record levels, closed Thursday at $208.21 and fell 3% to $201.61 in after-hours trading.

Overall, Visa's first-quarter profit rose 10% to $3.27 billion, or $1.46 a Class A share, the company said Thursday. Net revenue rose 10% to $6.05 billion.

Analysts expected $1.46 a share on $6.08 billion.

Higher spending has helped credit-card companies post record results. Mastercard Inc. and American Express Co. this month also reported quarterly results that beat analysts' projections, though Discover Financial Services' revenue results for the most recent quarter fell slightly shy of targets.

The company's board approved an additional $9.5 billion to buy back stock, adding to the roughly $1.7 billion left as of Dec. 31 from a previous authorization, Visa said.

Payments volume, adjusted for foreign-currency fluctuations, rose 8%. Meanwhile, volume from cross-border transactions, which typically carry larger fees, rose 9%.

The San Francisco-based company paid $1.75 billion during the quarter in client incentives, or long-term contracts with merchants, clients and other partners to expand its network and payment volume.

This year Visa projects incentives to eat away about 22.5% to 23.5% of gross revenue.

Visa is the largest U.S. card network, and its clients have largely included banks that issue credit and debit cards. This month, it made a big bet on digital payments with a roughly $5.3 billion deal to buy Plaid Inc., which connects apps like mobile-payment services Venmo and robo adviser Betterment to users' bank accounts.

"We see it as a natural extension of our network of networks," Chief Executive Al Kelly said Tuesday at the annual shareholders' meeting.

The company still expects per-share profit for the year to increase by a midteen percentage and revenue to increase by a low double-digit percentage. The Plaid acquisition isn't factored into the guidance, the company said.

Company officials said it was too early to estimate the impact from a deadly virus outbreak in China. The World Health Organization on Thursday declared the outbreak a public health emergency of international concern, which recognizes that international public-health authorities consider the respiratory virus a significant threat beyond China and seeks to gain political and financial support to stop it.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

January 31, 2020 02:47 ET (07:47 GMT)

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