Dow Jones payments processing giant Visa reported earnings jumped nearly 20% for its Q2 results late Tuesday. Visa stock is just below a buy zone, edging lower in trading Wednesday. Rival Mastercard topped expectations for its Q1 results early Thursday.
Credit card competitor American Express reported a 12% earnings slump, to $2.40 per share, in its Q1 report last Thursday, missing estimates of $2.66 per share. Meanwhile, revenue leapt 22% to $14.28 billion, surpassing FactSet's analyst consensus forecast of $13.98 billion.
Payments Update
Visa felt little effect from the recent banking crisis. That crisis, sparked by SVB Financial's Silicon Valley Bank collapse, sent shock waves through financial markets. It also forced regulators to scramble for emergency relief and prompted calls for stricter legislation for the industry.
Banks took another hit this week as First Republic stock collapsed after reporting harsh deposit outflows during its first quarter. Visa remained unfazed.
"Things have been completely normal," Visa Chief Financial Officer Vasant Prabhu said at the Wolfe Research conference on March 15. "Debit and credit cards have been usable, without any disruption whatsoever. They're settling every night. So, really, no impact whatsoever."
Visa and Mastercard don't carry balances on their books, unlike American Express and Discover Financial. Instead, Visa and Mastercard make money on credit and debit card transaction fees while issuing banks such as JPMorgan Chase carry the upside and downside risk.
Is MA Stock A Buy Right Now? Here's What Earnings, Mastercard Stock Chart Show
Mastercard
Results: Mastercard adjusted earnings rose 1.4% to $2.80 per share on an 11% revenue jump to $5.7 billion.
Expectations: Analysts expected Mastercard earnings to dip 1.8% to $2.71 per share while revenue surges 8.4% to $5.64 billion.
Net payment network revenue increased 7% over the year. Cross-border volume leapt 35% on a local currency basis. Gross dollar volume grew 15% on a local currency basis to $2.1 trillion. Mastercard's switched transactions, which include authorization, clearing and settlement transactions, increased 12% from last year.
MA Stock
MA stock swung 1.9% higher Thursday to 373.67 following results. Shares eased 0.5% Wednesday to 366.76.
The stock trading in the buy zone for its double bottom base after surpassing the 369.25 buy point on April 13. MA stock reclaimed its 10-day moving average and is holding its other technical lines.
Visa Earnings
Results: Visa reported adjusted earnings leapt 19.4% to $2.09 per share on 11% revenue growth to $8 billion.
Expectations: Analysts expected Visa adjusted earnings to jump 11.1% to $1.99 per share on 8.5% revenue growth to $7.79 billion.
Payments volume rose 10% and processed transactions increased 12% from last year. Cross-border transaction volume jumped 24%. Excluding Europe, cross-border volume rocketed 32% over the year.
International transaction revenue bolted 24% to $2.75 billion, slightly higher than forecasts of $2.735 billion. Data processing revenues increased 10% to $3.82 billion, shying out projections of $3.77 billion.
Visa has logged eight straight quarters of sales and earnings gains. It averaged 24% earnings growth and not quite 17% growth in revenue over the past three quarters.
Visa Stock
Visa stock is just below buy zone from a 230.15 handle buy point for its current consolidation. The stock is climbing out of a long, deep consolidation going back to July 2021.
The credit card company has a 92 EPS Rating out of a best-possible 99 after averaging 30.7% earnings growth over the past seven quarters. Visa's relative strength line is off highs from the beginning of January. But Visa stock has an 85 RS Rating, indicating it is outperforming a majority of market peers. Visa stock has a near-perfect 96 Composite Rating, which combines a number of technical indicators into one easy-to-read score.
V stock edged 0.4% to 229.01 Thursday. Shares slid just below the buy zone Wednesday after weakening 1.4% Tuesday.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
