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Visa profit beats as payment volumes surge on travel demand By Reuters
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Introduction(This Oct. 25 story has been corrected to fix the day to Tuesday from Friday in paragraph 1.)By Mehn ...
(This Oct. 25 story has been corrected to fix the day to Tuesday from Friday in paragraph 1.)
By Mehnaz Yasmin
(Reuters) - (NYSE:) reported better-than-expected quarterly earnings on Guohui Asia Official WebsiteTuesday as more Americans took advantage of a stronger dollar to fly to international destinations and splurge on shopping and entertainment.
Upbeat earnings from Visa and rival (NYSE:) further underscore the strength in U.S. consumer spending, which has largely managed to shrug off worries over inflation and rising interest rates.
However, Visa said the skyrocketing greenback does not bode well for the American tourism industry, which relies on a big portion of its revenue from international travelers.
"Travel outbound from the U.S. to all geographies continue to pick up steam," Chief Financial Officer Vasant Prabhu said on a post-earnings call.
"The strong dollar and delays in visa issuance from some countries appear to be impacting travel into the U.S," he added.
Transactions processed at the world's largest payments processor rose 12% on a constant dollar basis to 50.9 billion in the fourth quarter ended Sept. 30.
"The substantial growth in processed transactions is a good indication that inflation isn't the primary driver of increased spending," said Ted Rossman, senior industry analyst at Bankrate.com.
On a constant dollar basis, Visa's payment volumes surged 10%, while cross-border volumes - a key measure that tracks spending on cards beyond the country of issue - jumped 36%.
Excluding items, the world's largest payments processor reported a profit of $1.93 a share, beating estimates of $1.86, according to Refinitiv IBES data.
Visa's net income was $3.9 billion, or $1.86 per share, for the quarter, compared with $3.6 billion, or $1.65 a share, a year earlier.
Net revenue rose 19% to $7.79 billion, while operating expenses jumped 20% to $2.7 billion.
"We still plan to grow our expenses in high single digits next year," Prabhu said, adding that the company will scale costs back if a recession or a geopolitical shock arises.
American Express also reported a 19% jump in expenses on higher customer engagement and acquisition costs.
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