Visa Q1 Profit Soars: Holiday Shopping Season Boosts Spending
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Visa Inc. (NYSE: V) reported a better-than-expected first-quarter profit on Thursday, as the payment processing giant said consumer spending rose sharply during the holiday shopping season. The company's revenue climbed 10% to $9.5 billion, while payments volume, an important barometer of consumer and business spending, increased 9%.
The company's shares rose 1.8% in extended trading as investors reacted positively to the better-than-expected results. The performance was also driven by strong domestic and international travel demand and a strong online shopping season.
Consumer spending remains resilient and strong, said Visa Chief Financial Officer Chris Suh, citing both US and global trends, which are likely to continue in the near term with a solid labour market and sustained wage growth.
A major driver of Visa's results was a 16% increase in cross-border volume, excluding intra-Europe. Processed transactions rose 11% in the quarter, while the company's adjusted profit per share came in at $2.75, beating analysts' expectations of $2.66.
The performance of the payment processing giant is a positive indicator for the broader economy, suggesting that consumer spending remains a key driver of growth. Visa's results also bode well for its rival, Mastercard (NYSE: MA), which reported a strong fourth-quarter profit earlier in the day.
Despite the concerns of an economic slowdown, Visa's results indicate that consumer spending is likely to remain strong in the coming quarters. As the company continues to benefit from strong travel demand and online shopping trends, investors are likely to remain optimistic about its prospects.
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