Visa Posts Higher Than Expected Profit for Q4 on Rising Credit Card Spending

October 27 00:00 2011

New York, October 27 ( – Visa Inc., has reported a higher-than-estimated fiscal fourth-quarter profit mainly as credit card spending rose above debit card spending. The world’s biggest payments network posted an increase of 14 percent in net income for the three months ended Sept. 30 to $880 million, or $1.27 a share, from $774 million, or $1.06, a year earlier.

Analysts had expected earnings per share of $1.25. Visa has been exceeding the average estimates every quarter since its initial public offering in March 2008. However, Visa credit card spending in the U.S. outpaced spending with debit cards for the first time since at least 2005. The latest federal caps on fees that banks collect for debit transactions are also partly responsible for encouraging consumers to use credit cards.

Visa Chairman and Chief Executive Officer Joseph W. Saunders said in a conference call with analysts after results were announced that “we are working with each of our clients on an individual basis to help them develop a credit-card strategy, particularly if they want to expand it, and many of them do. That will be one of the success stories of 2012.”

Visa stock rose $1.34, or 1.5 percent, to close at $92.02 yesterday in New York. There has been a gain of 31 percent this year in the stock but it lags behind the 47 percent gain for MasterCard Inc., the No. 2 network. Fourth-quarter operating revenue was $2.38 billion, missing the average estimate of $2.39 billion by analysts.