New York: Visa Inc, the world’s largest credit card network, posted higher-than-expected quarterly earnings on Wednesday as consumers used their cards more, and the company cut expenses, sending the shares higher.
However, Visa lowered its outlook for net annual revenue growth to a high-single digit from a previous estimate of a figure in the lower end of its 11 to 15% range, amid a fall in consumer spending and a fast deterioration of the global economy.
A stronger dollar also is expected to reduce revenue growth from abroad.
“The back half of 2009 is now looking to be more challenging than we expected. This will have ramifications to our revenue projections in the third and fourth quarters, though we remain committed to delivering our full year earnings per share and operating margin guidance,” chief financial officer Byron Pollitt said in a conference call with analysts.
Net income rose 35% to $574 million, or 74 cents per class A share, for the first quarter ended 31 December, compared with proforma profit of $424 million a year earlier, when the company was privately held.
Net operating revenue rose 17% to $1.7 billion, while total processed transactions increased 8% to 9.8 billion.
Visa said payments volume increased 12% for the quarter ended 30 September, which translates to revenue in the next quarter, but a slower pace than in recent quarters.
But adjusted operating expenses fell 4% to $728 million, as the company cut professional and consulting fees, and administrative costs.
Following the quarterly results, Visa reiterated its targets of an annual adjusted operating margin in the mid-to-high 40% range, annual adjusted diluted Class A common earnings per share growth of 20% or more, and annual free cash flow in excess of $1 billion.
Visa shares were up 7.3% to $52.70 in after-hours trade. The stock is almost unchanged in 2009.