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Visa reports better-than-expected quarterly profit

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Visa Inc, the world's largest credit and debit card company, reported a better-than-expected quarterly profit as a strengthening US job market and cheaper gasoline prices encouraged people to spend.

[BENGALURU] Visa Inc, the world's largest credit and debit card company, reported a better-than-expected quarterly profit as a strengthening US job market and cheaper gasoline prices encouraged people to spend.

Shares of the company, which also announced a 4-for-1 split of its class A common stock, rose 4.4 per cent in extended trading on Thursday.

Visa's net income rose to US$1.57 billion, or US$2.53 per Class A share, in the quarter ended Dec 31 from US$1.41 billion, or US$2.20 per Class A share, a year earlier.

Analysts on average had expected earnings of US$2.49 per share on revenue of US$3.34 billion for the company's first fiscal quarter, according to Thomson Reuters.

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Total operating revenue rose 7 per cent to $3.38 billion. "Currency fluctuations haven't hurt them too badly, which was a concern," said Gil Luria, an analyst at Wedbush Securities Inc.

About 60 per cent of Visa's transaction volumes are outside the United States.

Visa, a Dow Jones Industrial Average component, recorded cross-border volume growth of 8 per cent on a constant dollar basis, down from 12 per cent in the year-earlier quarter.

The company, which earns money from both the volume and value of transactions using its cards, said total volume increased to US$1.90 trillion from US$1.84 trillion, helped by a better holiday shopping season in the United States.

Visa reaffirmed its revenue and margin forecasts for 2015 after taking into account an expected 2 percentage point negative impact from changes in foreign exchange rates.

Up to Thursday's close of US$248, Visa's shares had gained about 15.5 per cent since it last reported earnings on Oct 29. The Dow Jones Industrial average rose about 2.6 per cent in the same period.

REUTERS