NEW YORK, N.Y. – Visa’s quarterly profit rose 11 per cent as consumer spending grew on the credit and debit card processor’s massive payment network.
Visa said Thursday it earned $1.57 billion, or $2.53 per share, in the October-December quarter. That compares with a profit of $1.41 billion, or $2.20 per share, in the same period a year ago.
Revenue was $3.38 billion, up from $3.16 billion.
Analysts surveyed by FactSet expected Visa to earn $2.49 per share on $3.34 billion in sales.
Visa, and its competitor MasterCard, do not issue credit and debit cards directly. Instead, the two companies operate payment networks that banks and merchants sign up to use, and in exchange Visa and MasterCard take a percentage of each sale as a fee.
However, since the companies are directly exposed to spending trends, the companies function as barometers for the health of the U.S. consumer.
Visa said it processed $1.2 trillion in payments on its network in the latest quarter, up 11 per cent compared to a year ago. Most of the growth was in the U.S., where payment volumes were $651 billion in the quarter, compared with $591 billion in the same period before.
Visa’s results echoed similar comments from American Express, which operates its own payment network and also issues its own branded credit cards. American Express said last week it saw a notable uptick in consumer spending late last year.
Visa also announced a 4-for-1 stock split, effective March 19.
Shareholders will receive three additional shares for each share they own as of February 18. Based on the close of Visa’s stock Thursday at $248, the new shares will be worth $62 each.
Visa did not give a reason for the stock split. However, Visa’s stock has the highest price of the 30 companies that make up the Dow Jones industrial average, and one of the highest of the companies in the Standard & Poor’s 500 index.
The split itself won’t change Visa’s market value. But it can make the shares affordable for more investors, potentially lifting the stock’s price.
Shares of Visa rose 4 per cent in aftermarket trading to $259.03. The stock has gained 14 per cent in the past 12 months.