Visa Immune to Recession - Profit UP 71%!

It was the FIRST quarter since Visa was founded that debit payment VOLUME exceeded credit payment volume.  Not the number of transactions, but the volume.  The paradigm shift continues...


Here's the press release:

BOSTON — Visa Inc.'s fiscal second-quarter profit rose nearly 71 percent, beating Wall Street expectations, as cost cuts and international gains offset U.S. consumers' growing reluctance to use credit cards during a recession.

The world's largest electronic payment network today also said it expects a slight improvement in its full-year fiscal 2009 profit margin compared with its earlier guidance.

San Francisco-based Visa reported net income for the three months ended March 31 of $536 million, or 71 cents per share. That's up from $314 million, or 39 cents per share, in the year-earlier quarter.

Not counting one-time items including restructuring and amortization expenses, Visa's adjusted profit was $553 million, or 73 cents per share. On that basis, analysts surveyed by Thomson Reuters expected a profit of 64 cents per share, on average.

Revenue rose 13 percent to $1.64 billion, slightly ahead of analysts' forecast of $1.61 billion, and in line with the company's expectations. Visa earns revenue primarily from fees it charges to process payments made with credit and debit cards, which has enabled it to weather the recession better than banks that issue credit cards and make loans.

Despite its growing profit and revenue, Visa's payments volume dipped 1 percent to $675 billion for the period ended Dec. 31 — Visa reports some operational results on a three-month lag. The U.S. payment volume decline was slightly
steeper than the overall decline, but was partly offset by growth in other regions of the world that are increasingly embracing credit and debit payments over cash and checks. Total cards carrying the Visa brands rose 8 percent over a year ago, to more than 1.7 billion.

The shift to electronic payments "continues unabated" despite the recession, Chairman and Chief Executive Joseph Saunders told analysts on a conference call.

While calling Visa "resilient" amid the sour economy, Saunders conceded his company "is not immune."

For example, Visa reported increasing consumer reliance on debit transactions rather than credit, with less spent per transaction, as consumers become more conservative. The quarter that ended Dec. 31 marked the first since Visa was founded in the 1970s that U.S. debit payment volume exceeded credit payment volume.

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