Visa Inc.'s profit jumped 26 percent in its fiscal second quarter from a year earlier as the company benefited from strong growth in payments volume, service revenue and a one-time tax gain.
The latest earnings exceeded Wall Street estimates, but revenue fell slightly short. Management said Thursday that revenue growth was hurt during the January-March quarter by a stronger U.S. dollar and one-time items.
The company projects that the same factors will have a slightly more pronounced impact on revenue growth in the third quarter, but added that it expects revenue growth will rebound in the company's fiscal fourth quarter.
Shares of Visa fell almost 4 percent in after-hours trading.
Foster City, Calif.-based Visa is the world's largest processor of debit and credit card payments. As such, it benefits from heightened consumer spending, and its results are closely watched because they can be a window into the buying habits and financial health of consumers.
An unusually bitter winter sent factories, hiring and consumer spending into hibernation earlier this year, but signs emerged last month that consumers started spending more. U.S. retail sales rose last month by 1.1 percent.
Visa's Chief Financial Officer Byron Pollitt said on a conference call with Wall Street analysts that the Easter holiday and better weather helped boost U.S. payment volume growth 12 percent in the first 21 days of April.
"So as we get back to more normal periods post-Easter and post-weather, I think we'll see a more normalized growth rate and one that may very well have some pent-up demand fueling it," he said.
Continue reading this story on the...