LOS ANGELES (AP) - Visa Inc. returned to a profit in its fiscal third quarter, aided by strong revenue growth as it processed more charge and debit card transactions worldwide.
LOS ANGELES (AP) — Visa Inc. returned to a profit in its fiscal third quarter, aided by strong revenue growth as it processed more charge and debit card transactions worldwide.
The results topped Wall Street estimates and its shares rose 2.3 percent in after-hours trading on Wednesday.
The company also said that it received an authorization for a share buyback program of $1.5 billion. It raised its full-year adjusted earnings and revenue growth outlook.
Visa doesn't issue cards. The company, based in Foster City, Calif., is the world's largest processor of debit and credit-card payments, and makes money from processing card transactions. As such, it benefits from heightened consumer spending.
This year, the economy is showing more robust signs of growth, with employers having added an average 202,000 jobs the past six months, up from 180,000 in the previous six. The housing market is also gaining strength. And consumer confidence last month reached the highest level since January 2008, according to the Conference Board.
Those factors have helped boost confidence among consumers, making them more willing to spend. People have been slow, however, to return to spending with credit cards. There are signs, however, that that may be changing.
For the April-June quarter, payments and cash transactions made on Visa's network grew 10.5 percent to $1.74 trillion versus the same period last year. Of that, $683 billion came from U.S. transactions, a gain of 10.3 percent.
All told, the company processed 15 billion transactions during the quarter, up 14 percent from a year earlier.
That helped boost Visa's service, data processing, international transaction and other revenue for the quarter. At the same time, the company spent less on client incentives.
That factored into Visa's net income, which improved to $1.23 billion, or $1.88 per share, for the three months ended June 30. That compares with a loss of $1.84 billion, or $2.74 per share, in the same period last year.
The prior-year results included a $4.1 billion provision related to litigation costs and other one-time items.
Revenue grew to $3 billion from $2.6 billion a year earlier.
Analysts polled by FactSet had forecast, on average, earnings of $1.80 per share on revenue of $2.9 billion.
Visa raised its fiscal year revenue outlook to a gain of 13 percent from a previous estimate of an annual gain in the low double digits. It also boosted its adjusted earnings forecast to a gain in the low 20s percentage from a previous outlook of a gain of around 20 percent.
Visa shares ended regular trading down $1.83 at $186.75. The stock added $4.29 to $191.04 in extended trading.