Wall Street was shocked by Visa’s second-quarter earnings on Tuesday, which exceeded projections. The company’s shares rose 2.7% beyond the bell as customers chose to use their cards for everything from dining out to vacation. With Americans still eager to spend on large-ticket products and overseas vacation, US consumer spending has remained astonishingly robust despite higher-for-longer interest rates.
Speaking with investors over the phone, Visa officials reported that while travel outside of the US and Europe is strong, Asia-Pacific travel has been lackluster as the region’s post-pandemic recovery is still taking longer than anticipated. “Certain markets are not yet at 2019 levels and Asia in particular stands out. We do think it will continue to recover through the year … but the pace relative to our own expectations in Asia is a little bit slower than we anticipated,” CFO Chris Suh mentioned in conversation with the Reuters.
The measure of demand for international travel, cross-border volume excluding intra-Europe, increased by 16 percent. Throughout the period, processed transactions increased by 11%.
“Consumer spend across all segments from low-to-high spend has remained relatively stable. Our data does not indicate any meaningful behavior change across consumer segments,” Suh added.
Visa projects “low double-digit” net revenue growth for the current quarter, which ends on June 30. The business also reiterated its projections for revenue and profit in 2024.
“There were a lot of investors who thought that they would have to cut the guidance, and the fact that they did not, is a positive for Visa,” said Dan Dolev, senior analyst at Mizuho.
LSEG forecasts of $2.44 were surpassed by Visa’s adjusted profit per share of $2.51 in the second quarter. Its $8.8 billion in net revenue above analysts’ projections of $8.62 billion. Last week, American Express, a major credit card company, exceeded forecasts for first-quarter profit.
