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Credit cards ignore the crisis: Visa's earnings up by 35% 05/02/2009

Visa, the world's biggest credit card network, earned 574 million dollars (74 cents per share) in its first fiscal quarter.

Visa, the world's biggest credit card network, earned 574 million dollars (74 cents per share) in its first fiscal quarter, which ended on 31 December. This represents an increase of 35.37% compared to the same period the previous year.

The US company today reported that its operating income also increased between the two periods compared, rising from 1,488 million to 1,739 million dollars, an increase of 16.86%.

The chairman and CEO of Visa, Joseph Saunders, said when he presented the results that the company's management was "very satisfied" with the progress of business during the first fiscal quarter and with its "ability to achieve strong operating earnings."

The volume of payments handled by the company during the quarter (the total payments made using Visa credit cards) increased by 12% on the previous year, rising to 701 billion dollars, despite the international economic slowdown and consumers reining in their spending.

Moreover, the number of Visa-branded cards issued rose by 10% worldwide to 1.7 billion.

A prosperous business

"Despite the increasingly difficult economic situation, the increase in the number of transactions processed, the strength of credit and the international diversification of the business continue to highlight the strength of our business model," the company's CEO added.

Although he acknowledged that "tougher" times than expected were on the horizon, Saunders confirmed that Visa would maintain its profit targets for the year as a whole (which will increase by 20% or more) despite a slight drop in income (which will grow by less than 10%).

Like MasterCard, Visa does not issue credit lines, and therefore has been less hard hit by the credit crisis than other competitors.

Since its market launch last March, with the biggest public offering of shares in US history, and the second biggest in the world, its shares have dropped by 13%.

 

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