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Good news and bad news for Visa Inc. following its latest quarterly report. Detectable spending helped the company exceed earnings expectations, but a slowdown in U.S. volumes is weighing on the stock.
Mizuho analyst Dan Dolev reported that Visa’s U.S. payment volumes declined in the fiscal first quarter and the first three weeks of January as a result of dip in debit transactions.
Baird analyst David Kallo anticipated the stock to pull back due to the sudden decline in U.S. volumes and the number of total processed transactions.
Despite the pessimism, Visa Chief Financial Officer Chris Suh blamed the declines on short-term factors, mainly the extreme cold in Kansas City and Dallas that naturally kept people indoors.
As for the December-quarter volume trends, Suh blamed the slowdown on the mix of weekends and weekdays during the period.
Despite the challenging landscape, Visa posted net income of $4.9 billion, or $2.39 a share, beating the FactSet consensus view. Revenue rose to $8.63 billion. The company saw an 8% boost in payments volume and a 9% rise in processed transactions. Consumer spending has been “resilient” and “quite stable,” Suh said. The company saw a 16% increase in cross-border transactions.
Visa expects its net revenue and earnings per share to grow at an even higher rate in the fiscal second quarter.