An increase in the amount spent with credit cards by confident consumers has helped payments processor Visa Inc. surpass revenue expectations in its fiscal year first quarter.
Visa’s revenue during the three-month period that ended December 31 was up 9.1% from the same period one year ago to over $4.87 billion, or just above the estimate of $4.84 billion.
Profit at Visa rose ending the quarter at $2.51 billion equal to $1.07 per share, compared to one year ago of $2.08 billion equal to 86 cents per share. However, excluding two items related to the new tax law impact, profit was $2.53 billion equal to $1.08 per share. Analysts were expecting 99 cents per share in adjusted earnings.
However, the company updated its overall outlook for growth in operating expense to high mid-range single digits. The company reaffirmed it estimates for growth in yearly net revenue of the high single digits. Visa shares were down 1.7% in trading afterhours.
Card networks that include Mastercard and Visa are posting big increases in revenue as economies across many markets have strengthened, particularly across the U.S. and are enjoying the benefits as well of increased usage of credit cards amongst consumers as more overall transactions run across their networks.
Visa by many measures is the largest card network in the U.S. That includes the number of cards circulating and number of overall transactions. It processed 30.6 billion transactions, which was up over 12% from one year earlier. The company posted an increase of 10% on the basis of a constant dollar in credit and debit card payments volume processed on its network during the quarter from one year earlier that totaled $2 trillion.
Visa is planning to make an investment of its tax overhaul windfall in different ways. The board of directors approved a share buyback program of $7.5 billion and increased the quarterly cash dividend for Visa to 21 cents per share.
In addition, Visa said recently that is in currently improving its benefits from 401(k) for its employees based in the U.S. by increasing the amount it makes to matching contributions starting in February of this year.
Visa, which makes a contribution of $2 for every $1 the employees contributes as much as 3% of the employee’s base pay said it would increase it to 5% of employee’s base pay.
Visa CEO Alfred Kelly said Visa is evaluating ways it can make more investments in its business, its people and its communities.