Visa Set to Show Resilient Consumer Spending in Q4 Earnings Report

Visa, the largest payments network globally, is expected to demonstrate the positive impact of strong consumer spending when it announces its earnings report after the market closes on Thursday.

In December, retail sales saw a notable increase of 0.6%, surpassing expectations for the crucial holiday sales month. Additionally, the initial economic output data for the last quarter of 2023 revealed a higher-than-expected annualized gain of 3.3%.

Analysts predict that Visa’s earnings for the December quarter will be $2.34 per share, with revenue reaching $8.5 billion. This marks an 8% growth compared to the same period last year.

Notably, Visa’s shares have risen by 4.4% this year and an impressive 20.8% over the past 12 months.

Despite elevated interest rates, consumer spending has remained a bright spot in the U.S. economy recently. In early January, consumer sentiment, as tracked by the University of Michigan, reached its highest level since July 2021.

Visa’s Q3 results were fueled by a surge in summer travel and spending abroad. During this period, cross-border volume rose by 16%, while overall payments volume increased by 9%. The company attributed this success to resilient consumer spending and the ongoing recovery of international travel following the pandemic.

Looking ahead, management provided guidance in October for “high single-digit to low double-digit” revenue growth in percentage terms and “low-teens” adjusted earnings-per-share growth for the next fiscal year. Furthermore, Visa announced its plan to repurchase $25 billion worth of its own stock.

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