Visa tops earnings expectations, but Sting suffers from travel slowdown


Visa headquarters in Foster City, California in 2019.

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Visa Inc. saw an increase in the total amount of payments for its fiscal fourth quarter, but the company continued to be weighed down by the impact of the epidemic on international travel.

Eg MasterCard Inc. MA,
-8.11%
A few hours ago, VV,
-4.83%
The September-quarter results were reported on Wednesday afternoon, which showed continued weakness in travel-related spending despite greater improvement in household categories. Payment volume for the period rose 4% on a constant-dollar basis, while cross-border volume declined 41%, excluding intra-Europe transactions.

Regarding the company’s earnings, Chief Financial Officer Vasant Prabhu said, “Recovery so far has been uneven, V-shaped for domestic volumes but L-shaped for cross-border volumes.” Cross-border spending typically gives higher yields for visas, so the reason for the slowdown is “a pressure on revenue growth, which will continue into fiscal year 2021.”

Visa has seen a “rapid recovery” in confined corridors, where travel is “relatively frictionless”, including travel from the US to Mexico and the Persian Gulf states, and Prabhu said the company needs a broader travel landscape Hope to see. Like once ban ease. Nevertheless, at this time, “the boundaries are largely closed,” he admitted.

Shares rose 0.6% on Wednesday following Wednesday’s trade after losing 4.8% in the regular session.

Read: MasterCard shares slipped after weak travel spending pressure

Visa saw its fiscal fourth-quarter revenue drop by $ 5.10 billion from $ 6.14 billion a year earlier, while analysts polled by FactSet estimated $ 5 billion.

A year ago the company posted $ 2.14 billion, or 97 cents per share, in total income, while $ 3.03 billion, or $ 1.34 per share. On an adjusted basis, Visa earned $ 1.12 per share, down from $ 1.47 a year earlier and above the consensus of $ 1.09 FactSet.

Visa declined to provide a formal quantitative approach to Fiscal 2021, citing the uncertainties brought by the epidemic, although the company provided some clues as to how the year might come into play. The credit-card giant expects revenue growth to decline during the first half of FY 2021.[s] It is noteworthy that in the second half Prabhu said. He pointed to several unknowns around the spread of infection, the effects of vaccines and other factors that determine the magnitude of that revenue increase.

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In its report on Wednesday, peer MasterCard pointed to some October improvements in domestic spending from a year earlier, including a bump up to the end of October, stating that the company had a big e-commerce player Can be attributed to the promotional event. This broadly means that Amazon.com Inc. Of AMZN,
-3.76%
Prime Day, which shifted from its typical July event due to an epidemic in October this year. It is possible that Visa received a similar bump from Prime Day.

Visa shares have fallen 8% in the last three months as the Dow Jones Industrial Average DJIA
-3.43%
0.5% is added.

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