Net income for the fiscal second quarter ended March 31 climbed to $881 million, or $1.23 a share, from $713 million, or 96 cents, in the same period a year earlier, the San Francisco- based company said yesterday in a statement. The average estimate of 29 analysts surveyed by Bloomberg was $1.21 a share.
Chief Executive Officer Joseph W. Saunders, 65, is buying back shares as more people pay with plastic and consumer spending rebounds. U.S. household purchases, which account for about 70 percent of the economy, rose at a 2.7 percent pace in the first quarter, the Commerce Department said last week.
“We continue to have a huge opportunity almost everywhere in the world,” Saunders said in a conference call with analysts. “I think our numbers would suggest we are doing quite well in Asia, other parts of Latin America and other regions outside the U.S. I’m bullish on where we’ll be in the next few years.”
Despite the strong report, reaction of share prices was initially down, apparently because of concerns regarding potential effects of the Durbin amendment on Visa.
Saunders is facing investor concern that U.S. caps on debit-card “swipe” fees, or interchange, may lead to more regulation and damage Visa’s business model. Visa and MasterCard set the fees and pass the money to card-issuing banks.
In the Operational Performance Data released along with the earnings, Visa U.S. credit card spending volume was up a healthy 9.1 percent, but credit card accounts on file declined 1.4 percent in Q4/10 (the latest quarter released for that statistic).
Read the story here: http://www.bloomberg.com/news/2011-05-06/visa-posts-24-profit-increase-as-global-card-spending-rises.html