Dow Jones payments giant Visa reported Q3 results late Tuesday followed by an earnings beat from rival Mastercard early Thursday. Visa stock inched lower Wednesday following its report. Both and Visa stock and MA shares are trading in buy zones.
American consumers have proven surprisingly resilient in 2023 despite recession concerns early in the year. The Consumer Confidence Index is at its highest level since July 2021, according to the latest release from the Conference Board. Strong consumer spending propelled growth in travel, retail and auto stocks, often benefiting credit card companies.
Cross-border fees are especially important for Visa and Mastercard.
Meanwhile, Visa and Mastercard face an antitrust lawsuit from Block. The parent company of Square sued the credit card giants on July 14, alleging the payment networks and their member banks charged inflated fees and used their market power to employ anticompetitive practices.
Visa Earnings
Visa reported adjusted earnings rose 9% to $2.16 per share on 12% revenue growth to $8.1 billion.
Analysts expected adjusted Visa earnings increase 6.5% to $2.11 per share in the fiscal third quarter. Revenue was seen climbing 10.8% to $8.06 billion.
Payments volume increased 9% for the quarter while cross-border volume popped 17%.
Service fee revenues rose 15% to $3.66 billion, topping expectations of $3.63 billion. Data processing fees also rose 15% to $4.1 billion, beating FactSet estimates of a 10.8% gain. International transaction revenue swung 14% higher to $2.92 billion, but fell short of forecasts of $3.01 billion.
Visa Stock
V stock slid 1.1% Thursday and ticked 0.7% lower Wednesday following results. Shares dipped 0.9% to 238.69 Tuesday prior to earnings.
Visa stock is trading just below the buy zone for a flat base after surpassing the 235.57 buy point on June 30. Shares are trading just above their 21-day moving average. The current buy zone extends to 247.34.
Mastercard
Mastercard reported a 13% increase in adjusted earnings to $2.89 per share while revenue jumped 15% to $6.3 billion.
Analysts expected Mastercard earnings to increase 10.5% to $2.83 per share while revenue climbed 12.4% to $6.18 billion.
Cross-border volume spiked 24% year-over-year for the quarter and Mastercard CEO Michael Miebach noted that it reached 154% of pre-pandemic levels.
Gross dollar volume increased 12% for the quarter and purchase volume rose 14% compared to last year. Switched transactions, which encompass authorization, clearing and settlement activities, increased 17% from 2022.
MA Stock
Mastercard stock fell 2% Thursday following results. Shares hit a record 404.86 on Monday.
MA stock is trading in the buy zone for a flat base and holding above its technical lines. Shares initially surpassed the 392.20 buy point on June 30. The current buy zone stretches to 411.81.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
