Shares of Visa (V -1.67%) were falling today after the credit card processing giant posted a narrow beat on the top and bottom lines in its first-quarter earnings report, but it wasn’t enough to impress investors. Rival American Express also delivered a strong earnings report this morning, which investors may have interpreted as a sign that AmEx is outperforming Visa. Concerns about the global economy also seemed to weigh on the stock.
As of 12:14 p.m. ET, Visa stock was down 1.6% after falling as much as 2.7% earlier in the session.
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Visa delivers a solid quarter
The report itself left little to complain about. Payments volume was up 8%, and cross-border volume continues to rebound after struggling during the pandemic, up 16%.
Overall revenue rose 9% to $8.63 billion, beating expectations of $8.54 billion. On the bottom line, it reported adjusted earnings-per-share growth of 11% to $2.41, which beat the consensus at $2.34.
The company continued to return cash to shareholders, spending $4.4 billion on share repurchases and dividends, nearly equal to its generally accepted accounting principles (GAAP) net income of $4.9 billion.
CEO Ryan McInerney said, “Looking ahead, we continue to see significant opportunity across consumer payments, new flows, and value-added services.”
After the second quarter started, the company acquired Pismo, a global cloud-native issuer processing and core banking platform.
What’s next for Visa?
Visa’s guidance for 2024 was also promising, as the company called for revenue growth of upper-mid to high-single-digit revenue for the second quarter, and high-teens earnings per share (EPS) growth. For the full year, Visa sees low-double-digit revenue growth and low-teens EPS growth.
Despite the solid results, analysts seemed concerned about a weak global consumer and tailwinds in the travel sector fading.
The stock remains expensive at a price-to-earnings ratio of 31, but investors may want to take advantage of the pullback, as the stock deserves to trade at a premium.
American Express is an advertising partner of The Ascent, a Motley Fool company. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Visa. The Motley Fool has a disclosure policy.
