NEW YORK (AP) — Visa Inc.’s fiscal second-quarter profits fell 2% from a year earlier, as the company dealt with a slowdown across its payment network due to the global pandemic.
The payment processing giant said Tuesday that it earned $3.03 billion in its second quarter ended March 31, or $1.38 a share, down from $3.08 billion in the same period a year ago. Due to Visa buying back its own stock, the company’s earnings per share last year was also $1.38.
The results were better than the $1.27 per share that analysts expected on average, according to FactSet. Shares rose 1.8% in after-hours trading.
Due to the nature of Visa’s business model and how the company reports revenue, this quarter’s results are more difficult to compare than previous quarters. However there are signs that Visa’s business model took a hit during the pandemic, as the global economy has slowed and travel has come to a standstill.
Cross-border payments volume across Visa’s network were down 11% from a year earlier, the company said.
That said, it appears payments are improving, particularly in the U.S. as the economy recovers. U.S. payments volume was up 13.5% from a year earlier on a constant dollar basis.
While credit card transactions declined steeply from a year earlier, debit card transactions were up 21% in the same period. A number of Americans shied away from using paper money in the pandemic, which may have translated into people using debit cards and touchless transaction. They also purchased more groceries and other items online.
Visa did not provide a fiscal full-year forecast, citing the uncertainty related to the pandemic and a lack of clarity about when travel would pick up again.