Charge! Visa posts strong quarter

Made of plastic, so fantastic!

Visa flourished this quarter as people spent more with cards, posting strong Q2 results with a 23% increase in adjusted earnings that beat analysts’ estimates. In comparison to Wall Street predictions of $1.51 a share, the world’s largest credit and debit-card network saw shares rise to $1.60. EPS surged to $1.91 versus last year’s $1.23.

 CEO Joseph Saunders credited the company’s strong financial performance this quarter to “continued growth of U.S. credit products, strong cross border spending and expansion of Visa's core business in international markets.” The company said Americans rang up 12% more on their charge cards for the quarter. Debit card use grew by only 4% to $284 million, however, the slowest growth in a year. The company also disclosed in a filing with the Securities and Exchange Commission that it received a “civil investigative demand” on March 13 from the Antitrust Division of the U.S. Department of Justice for documents and information about its response to a new law and rules limiting debit card fees.

Visa will inevitably lose some of its dominant market share of the so-called “swipe fee” revenue as a result of the new regulations, Saunders said. Visa's smaller rival, MasterCard (MA), said its profit rose 21.2% thanks to higher card use and market-share gains in the U.S. debit-card market. Visa further revised its financial outlook for fiscal 2012, and now is anticipating annual earnings per share to grow in the high teens-to-low twenties from the prior high teens band.

Visa (V : NYSE : US$116.41), Net Change: -5.78, % Change: -4.73%, Volume: 11,859,809

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Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

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