Visa Likely to Post Higher 4Q Profit, Revenue -- Earnings Preview
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 email@example.com
(END) Dow Jones Newswires
October 26, 2021 12:38 ET (16:38 GMT)
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