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Visa Profit Matches Estimates as U.S. Retail Sales Strengthen

October 30, 2013

Visa Inc. (V:US), the world’s biggest bank-card network, posted a fiscal fourth-quarter profit that matched analysts’ estimates as U.S. retail spending strengthened.

Net income (V:US) for the three months ended Sept. 30 fell 28 percent to $1.19 billion, or $1.85 a share, from $1.66 billion, or $2.47, a year earlier, the Foster City, California-based company said today in a statement. That equaled the average estimate (V:US) of 31 analysts surveyed by Bloomberg. Results for the fourth quarter of 2012 were helped by a $627 million tax adjustment.

Retail sales in the U.S., where Visa gets more than half its revenue (V:US), rose toward the end of the quarter as September’s 0.4 percent gain in purchases excluding vehicles followed a 0.1 percent increase in August. Chief Executive Officer Charlie Scharf also has pushed to expand abroad, particularly in emerging economies, where most spending is still done with cash.

“We continued investing in high-growth regions of the world, in products and technology to drive our performance, while maintaining disciplined expense control,” Scharf, 48, said in the statement. “We also have been consistent and decisive in returning excess cash to shareholders and maintain this commitment.”

Visa fell 0.2 percent to $203.82 at 4 p.m. in New York. The shares have increased 34 percent this year, outpacing the 19 percent advance for the 30-company Dow Jones Industrial Average. (INDU)

Visa, which has returned more than $15 billion to investors since its 2008 initial public offering, increased the quarterly dividend (V:US) 21 percent to 40 cents last week.

“There’s still a lot more to do considering how much excess cash this company has on its balance sheet (V:US),” Jason Kupferberg, an analyst at Jefferies Group LLC, said in an interview before results were announced.

MasterCard Results

American Express Co. (AXP:US), the biggest credit-card issuer by purchases and operator of the third-largest U.S. payments network, said Oct. 16 that quarterly profit rose 9.3 percent to $1.37 billion on higher spending worldwide. Discover Financial Services (DFS:US), the No. 4 network, said last week that net income declined 6.9 percent as the company increased the amount of money set aside to cover future loan losses.

MasterCard Inc. (MA:US), the second-biggest payments network by processed transactions, is scheduled to announce results before U.S. markets open tomorrow. The Purchase, New York-based company may report that third-quarter net income rose 9 percent to $841.4 million from a year earlier, according to the average estimate (MA:US) of 21 analysts in a Bloomberg survey.

Visa, MasterCard and the biggest U.S. banks are awaiting approval of a multibillion-dollar settlement over fees charged to merchants when consumers pay with credit cards. The decision by U.S. District Judge John Gleeson in Brooklyn, New York, could end an eight-year legal battle pitting the financial firms against retailers including Wal-Mart Stores Inc.

To contact the reporter on this story: Elizabeth Dexheimer in New York at

To contact the editor responsible for this story: David Scheer at

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