Despite facing headwinds from a strong dollar, the world’s largest payment network, Visa Inc was still able to beat first quarter earnings estimates. The firm has since affirmed its full year profit and revenue forecast, issued late last year.
Visa Inc expects its adjusted Class A earnings per share to rise in the low-end to mid-teens percentage range. Revenue on the other hand should rise in the high single digit to low double digit, range on constant currency basis. Affirming full year guidance comes as an s surprise. A good number of analysts have already reduced their profit estimates by an average of 5% and revenue by 2%
Investors should find it encouraging that Visa Inc is remaining firm about its growth prospects. That is in part because many people continue to question the health of the global economy. A strong dollar is not always good for business especially on revenues generated overseas. Over the past year, the value of the dollar against other basket currencies has increased by 11.7%.
Amidst the turbulence in the currency market, the payments giant posted first-quarter earnings of 69 cents a share. Analysts were expecting earnings of 68 cents a share. Revenue, on the other hand, came in at $3.57 billion against analysts’ estimates of $3.62 billion. Net income as a result of a 5.4% increase in revenue was up by 23.7% to $1.94 billion
Payments volumes handled in the quarter were up by 11% to $1.3 trillion on a constant dollar basis. Volumes in US accounted for more than half of total volumes was up by 9.5%. Chief executive officer, Charlie Chart, however, notes that uneven global economy as well as a strengthened dollar continues to weigh in on cross border volume and revenue growth.
Visa Inc is in the process of acquiring its former subsidiary Visa Europe in a deal believed to be worth $23.3 billion. The acquisition should give the global payment company an opportunity to cut its costs in the region also moves to raise its fees.