V Visa Inc

By Kimberly Chin

Visa Inc. is scheduled to report results for its fiscal fourth quarter post market Tuesday. Here's what you need to know:

EARNINGS FORECAST: Analysts on average expect a profit of $1.56 a share, compared with 97 cents a share reported in the same quarter a year ago, according to a FactSet poll. Visa will hold its investor call at 5 p.m. ET.

REVENUE FORECAST: Analysts expect $6.52 billion, per FactSet, compared with the $5.1 billion Visa reported a year earlier.

WHAT TO WATCH:

CONSUMER SPENDING: Visa said its U.S. Spending Momentum Index was down in September, the second month in a row showing a decline. The index was 108.5 in September, seasonally adjusted, down 1.1 points from August, according to Visa.

Total payment volume growth may have decelerated in the fourth quarter relative to the June quarter, due in part to the timing of stimulus checks, Susquehanna Financial Group analysts said. Spending from last year's stimulus checks, which were received in April and May, was in full effect by September, whereas this year, the stimulus came in earlier, around March, meaning spending fully kicked in around June. "By the September quarter the additional funds were dried up," Susquehanna analysts said. "Thus, stimulus timing implies that growth in the June quarter significantly outpaced that in the September quarter," the analysts said.

Still, Visa expects spending to rebound in the fourth quarter as concerns over the coronavirus ease and holiday spending ramps up, it said earlier this month.

BUY NOW, PAY LATER TREND: As the buy-now, pay-later option resonates with consumers, they're often funding these transactions with their debit cards, giving a boost to card network providers like Visa and Mastercard Inc. They could "ultimately receive 4x the number of transactions they otherwise would have off the same volume," with the buy-now, pay-later method, said Raymond James analysts in a note.

Write to Kimberly Chin at kimberly.chin@wsj.com

(END) Dow Jones Newswires

October 26, 2021 12:38 ET (16:38 GMT)

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