(Reuters) - Visa Inc’s (V.N) results topped analysts’ estimates on Tuesday with a 23% drop in quarterly profit as consumer spending continued to be pressured by high unemployment due to lockdowns aimed at curbing the coronavirus outbreak.
Net income fell to $2.37 billion, or $1.07 per Class A share, in the quarter ended June 30, from $3.10 billion, or $1.37 per Class A share, a year earlier. (bit.ly/2P4JCy8)
Analysts had estimated, on average, that the company earned $1.03, according to IBES data from Refinitiv.
Analysts at Jefferies attributed the beat to lower-than-expected expenses.
Visa shares traded down nearly 2% after market hours.
The quarter was the first to reflect how spending on Visa transactions was impacted for three straight months by coronavirus-related shutdowns.
Visa said total payments volume decreased 10%, on a constant dollar basis, and the number of process transactions declined 13% from a year earlier.
Cross-border volume fell 37%, reflecting the fall in international travel.
But the company added its business drivers had “improved each month throughout the quarter.”
Consumer spending has vacillated during the pandemic, thwarted by the lockdowns and boosted by government stimulus checks.
The U.S. government reported earlier this month that retail sales rebounded in May and June from a sharp drop in April, and ended down 8% for the quarter from a year earlier.
The health crisis has triggered a massive shift in consumer spending towards e-commerce and brought a greater share of transactions to payment companies.
Visa’s results marked the first year-over-year decline in quarterly revenue and adjusted net income since the company went public in 2008 and became the world’s largest payment network.
Some of Visa’s service revenue, however, is recognized with a three-month lag.
Net revenue fell 17% to $4.84 billion, compared with an estimate of $4.83 billion from analysts.
Reporting by David Henry in New York; Additional reporting by C Nivedita; Editing by Sonya Hepinstall and Lisa Shumaker