“We’re seeing no evidence of a pullback in consumer spending,” said CFO Vasant Prabhu.
Visa Inc (V) – Get Visa Inc. Report shares edged lower Wednesday after the credit card issuer posted stronger-than-expected third quarter earnings as cross-border transactions topped pre-pandemic levels for the first time in more than two years.
Dow component Visa earned $1.98 per share over the three months ending in June, the group’s fiscal third quarter, well ahead of the Street consensus forecast of $1.74, per share, as group revenues jumped 19% to a Street-beating $7.3 billion.
Cross border spending was up 40%, Visa said, with payments volume up 12% on a constant-currency basis.
Looking into the final months of its current financial year, Visa said it sees revenue growth in the “high teens to 20% range in constant dollars”, with client incentives — a cost base for card issuers — ranging 26% and 27% of gross revenues.
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“We’re seeing no evidence of a pullback in consumer spending,. We keep looking for it, because we’ve heard some other people say it, and we’re not seeing any evidence of that,” CFO Vasant Prabhu told investors on a conference call late Tuesday. “If anything, affluent spending has been on the rise and is one of the reasons why we’ve seen some of the robust growth we saw this quarter.”
Visa shares were marked 0.23% lower in pre-market trading immediately following the earnings release to indicate an opening bell price of $212.00 each, a move that would trim the stock’s year-to-date gain to around 2.2%.
Last week, American Express (AXP) – Get American Express Company Report posted better-than-expected second quarter earnings Friday, and boosted its full-year revenue growth forecast, as a rebound in business and leisure travel trigged record cardmember spending.
Cardmember spending was up 30%, American Express said, while expenses rose 31% to $13.4 billion, thanks in part to the group’s focus on reward payouts to entice new members, with that tally coming in at 3.2 million.
Looking into the second half of the year, American Express said it now expects group revenues to rise by between 23% and 25%, up from its prior forecast of between 18% and 20%.
