Visa Inc Class A (NYSE: V) stock rose 1.95% after the company posted better than expected results for the first quarter of FY 19. The company has reported net income of $3 billion, up from $2.5 billion, in the year-ago period. Total payment volume grew by 11% in the period, and cross-border volume increased by 7%. Visa has reaffirmed its previously issued outlook for fiscal 2019, which calls for low double-digit revenue growth on a nominal basis, with about 1 percentage point of negative impact from foreign currencies. Cross broader volumes flowed through the quarter and into January. Process transaction growth was 11%, down 1 percentage point from last quarter; expense growth was 17%, primarily driven by personnel and marketing-related expenses and EPS growth was 21%.
Meanwhile, adjusting for Visa specific factors, spending during the holiday season in the United States was relatively strong. Stronger debit spends growth was offset by weaker credit performance, which slowed later in the holiday season. Retail growth was in line with last year, driven by mostly by e-commerce. E-commerce continues to grow more than 3 times faster than non-e-commerce. However, e-commerce growth did decelerate moderately compared to last year. E-commerce drove approximately one-third of consumer spending, up 2 percentage points versus last year. In terms of key gains for sales, Black Friday was the largest shopping day, boosted by almost half of the spend via e-commerce. Black Friday was the third largest e-commerce shopping day in the holiday season.
Moreover, during the fourth quarter, V had signed a long term partnership with Air Canada, which is the largest co-brand portfolio in Canada. In Mexico, Costco converted their private label card programs to be 100% Visa. Visa won the co-brand partnership with Amazon in India, which is expected to be one of the largest credit card portfolios in the country as it matures in the next few years.
V in the first quarter of FY 19 has reported the adjusted earnings per share of $1.30, beating the analysts’ estimates for the adjusted earnings per share of $1.25, as per the analysts surveyed by FactSet. The company had reported the adjusted revenue growth of 13 percent to $5.5 billion in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $5.4 billion. Order growth on a constant dollar basis was 7%, slowing 3 percentage points from last quarter.
Additionally, Visa has returned $2.9B of capital to shareholders in the form of share repurchases and dividends. The company has authorized a new $8.5 billion share repurchase program