Visa Shares Gain on Better-Than-Expected Overseas Card Spending
(Bloomberg) -- Visa Inc. shares advanced on a smaller-than-expected drop in spending by cardholders overseas, where governments have restricted tourism to stem the coronavirus pandemic.
Cross-border volume fell 29% in the company’s fiscal fourth quarter, less than the 33% analysts were anticipating, according to a statement Wednesday. Visa’s performance contrasts with results posted earlier in the day by Mastercard Inc., whose cross-border fees slid more than expected.
- Investors keep a close eye on cross-border volume because the transactions are more profitable for Visa and its rivals. Overall profit at the card network dropped 29% to $2.1 billion, or 97 cents a share, missing the $1.09 average of analyst estimates compiled by Bloomberg.
- The firm has seen a pick-up in spending on its cards in the U.S., aided by government stimulus and extra unemployment insurance. Purchase volume in the U.S. climbed 7.5% to $1.1 trillion, outpacing the 4% advance in spending on Visa’s cards globally.
- Visa shelled out $1.7 billion on rebates and incentives to lure banks and retailers to route transactions over its network. That was below the $1.77 billion average of analyst estimates.
- The shares rose as high as $185.30 at 4:07 p.m. in extended New York trading. The stock has dropped 3.7% this year compared with the 22% advance of the S&P 500 Information Technology Index.
- Read the full statement here.
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