February 3, 2010
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News: Visa Profits In First Quarter
Visa had very good fiscal first quarter which ended December 31st with an increase in profits by 33 percent. Visa, the world's largest debit and credit card payment network beat experts' predictions when it recorded profits of $763 million or $1.02 a share. Profits for same time last year were $574 million or 74 cents a share. Analysts had predicted a profit of 91 cents a share. the According to Visa's report, consumers continue to reduce credit card spending while switching to debit cards which outperformed credit by 72 percent. Visa like its rival, MasterCard, has fared better than lenders during the recession and credit crisis because the company does not actually lend funds, but merely processes debit and credit card payments.
Although earnings from credit card transactions did not grow as much as hoped, Visa made up for it with its branded debit card transaction fees. The company's overall payment volume for the quarter increased by 14 percent; credit card payments grew by 11 percent and debit card payments grew by 19 percent. Total number of payment transactions increased for same period last year by 12 percent to 10.9 billion. All divisions grew with an overall average of 13 percent, $1.96 billion up from $1.74 billion same time last year.
Visa highlighted its payment growth for the quarter at $720 billion, a 2.5 percent over the previous year. Total Visa branded debit and credit cards in circulation increased to 1.8 billion, or 5 percent globally from the previous year. In a statement, Joseph Saunders, Chairman and Chief Executive Officer of Visa said that the company is pleased with its strong first quarter. He expects the company's growth to continue trending upward as it executes it business plan and expands its payment networks and processing capabilities. Visa, Inc. is headquartered in San Francisco, California and is traded on the New York Stock Exchange (NYSE) under the symbol “V” and holds nearly 50 percent of the card market.