Visa shares climbed on Wednesday after the payments giant reported better-than-expected quarterly profit and raised its full-year forecast, helping to ease jitters over geopolitical tensions in the Middle East.
Strong quarterly results
The company posted adjusted earnings of $2.35 per share for the fiscal second quarter, surpassing analysts' estimates of $2.20 per share. Revenue rose 11% to $8.7 billion, also beating expectations.
Visa cited resilient consumer spending and growth in cross-border transaction volumes as key drivers. Cross-border volumes, which are often a bellwether for global economic activity, increased 16% year-over-year.
Raised outlook
Visa lifted its full-year revenue growth forecast to the low double digits, up from a prior outlook of high single digits. The company also raised its share buyback authorization by $10 billion.
"Our results this quarter demonstrate the strength of our business model and the continued momentum in consumer payments," said CEO Ryan McInerney.
Market reaction
Shares of Visa rose 3.5% in afternoon trading, outperforming the broader market. The stock has gained about 12% year-to-date.
Analysts said the results were a relief for investors who had been concerned about potential disruptions from the Israel-Hamas conflict and other geopolitical risks.
Industry impact
The strong report also lifted shares of rival Mastercard, which rose 2.1%. Both companies benefit from the secular shift away from cash and toward digital payments.
"Visa's results show that consumer spending remains healthy despite macro headwinds," said analyst Lisa Ellis of MoffettNathanson. "The raised guidance is a positive signal for the broader payments industry."
Visa's earnings come amid a busy week for corporate results, with investors watching for signs of how companies are navigating inflation, interest rates, and geopolitical uncertainty.
