Visa's Profits Surpass Expectations Thanks to Flexible Consumer Spending

Forex - Visa surpassed Wall Street's fourth-quarter profit expectations, leading to a 2% increase in its shares during after-hours trading. Despite high interest rates, U.S. consumer spending remained largely resilient, with analysts anticipating that confidence in a soft landing for the economy will revitalize spending growth. Payment volume increased by 8% in constant dollars for the quarter, while cross-border volume, a key indicator of international travel demand, rose by 13%, excluding Europe.

Visa's Chief Financial Officer Chris Suh stated in a discussion with analysts that consumer spending across all segments remained relatively stable compared to the third quarter. Suh noted, "The fundamental drivers have remained quite stable," adding that he expects consumer resilience to extend through 2025. However, payment volume growth in the Asia-Pacific region fell short of expectations due to the current economic environment, particularly with China grappling with weak business sentiment and a prolonged property crisis.

Visa forecasts adjusted net revenue growth for 2025 to be in the high single digits to low double digits. According to data compiled by LSEG, this figure corresponds to Wall Street's growth expectation of 10.8%. The company anticipates that adjusted earnings per share growth will be at the upper end of low double digits, compared to a growth expectation of 11.7%.