By Manya Saini and Pritam Biswas
(Reuters) -Visa’s second-quarter results beat Wall Street estimates on Tuesday as consumers shrugged off worries about a slowing economy and swiped cards on everything from travel to dining out, sending shares up 2 after the bell rose .7%.
US consumer spending has remained remarkably resilient despite longer interest rates, with Americans still looking to spend on big purchases and international travel.
Visa (NYSE:) executives said on a call with analysts that international travel remains healthy, especially from key markets of the U.S. and Europe, but emphasized that Asia-Pacific travel has been weak as the post-World War II recovery continues. pandemic continues. slower than expected.
But the world’s largest payments processor says strong e-commerce trends have helped offset weakness in Asian markets.
“Certain markets are not yet at 2019 levels and Asia in particular stands out. We do think the recovery will continue throughout the year… but the pace relative to our own expectations in Asia is slightly slower than we expected,” CFO Chris Suh said in an interview with Reuters.
Visa’s payment volume increased 8% in the second quarter. Cross-border volume, excluding intra-Europe, a measure of international travel demand, increased by 16%. Transactions processed increased by 11% in the period.
“Consumer spending across all segments, from low to high, has remained relatively stable. Our data does not indicate any meaningful behavioral change in consumer segments,” Suh said on a conference call after the earnings report.
The summer season is also typically strong in terms of travel volumes, as people fly both internationally and within the US for vacations.
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Visa expects “low double-digit” net revenue growth for the current quarter ending June 30. The company also confirmed its 2024 revenue and profit forecasts.
“There were a lot of investors who thought they would have to lower the guidance, and the fact that they didn’t is positive for Visa,” said Dan Dolev, senior analyst at Mizuho.
The positive gains come after Visa and rival Mastercard (NYSE:) reached a landmark settlement estimated at $30 billion in March to cap credit and debit card fees for merchants, with some savings likely to be passed on to consumers through lower prices. Analysts have said this would not be financially material for Visa and Mastercard.
Visa’s second-quarter adjusted earnings per share of $2.51 beat LSEG estimates of $2.44.
Net sales of $8.8 billion also exceeded expectations of $8.62 billion.
Credit card giant American Express (NYSE:) also beat expectations for first-quarter earnings last week.
