BOSTON — Visa Inc.'s profit rose 14% in the fiscal fourth-quarter as consumers spent more using its credit and debit cards and the volume of transactions it processed grew.
The San Francisco-based company, which processes transactions for banks, said net income in the quarter was $880 million, or $1.27 a share, up from $774 million, or $1.06 a share, a year earlier.
The earnings beat the expectations of analysts polled by Thomson Reuters, who were expecting the company to earn $1.25 a share.
"Visa continues to deliver strong results, with fourth quarter and full-year performance reflecting a business that is both resilient and flexible enough to adapt and flourish in a changing business environment," Joseph Saunders, Visa's chairman and chief executive, said in a statement.
The improved earnings come as Visa and competitor MasterCard Inc. are grappling with new regulations on debit-card transactions. Starting this month, banks face limits on the amount of fees they can charge merchants every time a bank's customer uses a debit card. The revenue from such fees, known as interchange, is collected by the client banks of Visa and MasterCard. But the two companies could face pressure if banks push them to offer concessions and other incentives on the fees that they also pay the processors for their services.
Visa, in a bid to protect its dominant share of the U.S. debit-processing market, in July disclosed plans to shake up pricing charged to merchants and their own banks as a way to give retailers an incentive to route more transactions over its networks. Visa plans to roll out its new pricing structure next year.
"We have been diligent in our efforts to grow our core business while successfully unlocking new revenue opportunities through strategic investments, both in our core business and into innovations that will ensure our foundation ...remains strong," Saunders said.
Visa's operating revenue in the quarter rose 13% to $2.38 billion.
The increase was driven by higher payments and transaction volume, which helps determine Visa's revenue. Visa and MasterCard don't lend to, or issue cards to, consumers; rather, they process the transactions for their client banks and generate more revenue if they handle more transactions.
Visa said the amount of purchases made with its cards rose 13% to $970 billion on a constant-dollar basis. The total number of transactions it processed increased 9% to 13 billion.
Visa's shares closed up 1.5% at $92.02 but were down 2.2% in after-hours trading.
