Visa allays slowdown fears as strong consumer spending lifts quarter

VISA Inc said on Tuesday it expects revenue to accelerate past pre-pandemic levels, reassuring investors of a sustained recovery against the backdrop of challenging macroeconomic conditions and sending its shares 5 per cent higher in extended trading. The forecast from the world’s largest payments processor followed an upbeat quarter fueled by a rebound in consumer spending as easing pandemic restrictions and falling Covid-19 cases encouraged more people globally to travel and shop. However, runaway inflation, interest rate increases and the invasion of Ukraine are clouding the outlook for global growth this year. Visa, which in March suspended its operations in Russia, warned of an about 4 per cent hit to its revenue this year from the Ukraine conflict, the latest global company to flag an impact from the crisis. Still, the payments giant said it was currently not seeing any material impact on cross-border travel in other parts of Europe as a result of the conflict. Cross-border volumes jumped 38 per cent during the second quarter, with total payment volumes rising 17 per cent. The company reported net income of US$3.6 billion, or US$1.70 per share, above analysts’ average estimate of US$1.65 per share, according to IBES data from Refinitiv. Visa’s operating expenses, however, surged 11 per cent to US$2.4 billion as it spent more on employee compensation and marketing. Rival American Express had also reported a strong rebound in spending last week, while closest rival Mastercard Inc – whose shares were up 3 per cent after the bell – is set to report on Wednesday. REUTERS