Visa Inc’s results topped analysts estimates on Tuesday with a 23 per cent drop in quarterly profit as consumer spending continued to be pressured by high unemployment due to lockdowns aimed at curbing the coronavirus outbreak.
Net income fell to $2.37 billion, or $1.07 per Class A share, in the quarter ended June 30, from $3.10 billion, or $1.37 per Class A share, a year earlier.
Analysts had estimated, on average, that the company earned $1.03, according to IBES data from Refinitiv.
The quarter was the first to reflect how spending on Visa transactions was impacted for three straight months by coronavirus-related shutdowns.
Visa said total payments volume decreased 10 per cent, on a constant dollar basis, and the number of process transactions declined 13 per cent from a year earlier because of the impact of COVID-19.
Cross-border volume fell 37 per cent, reflecting the fall in international travel.
But the company added its business drivers had “improved each month throughout the quarter.”
Consumer spending has vacillated during the pandemic, thwarted by the lockdowns and boosted by government stimulus checks.
The U.S. government reported earlier this month that retail sales rebounded in May and June from a sharp drop in April, and ended down 8 per cent percent for the quarter from a year earlier.
The health crisis has triggered a massive shift in consumer spending towards e-commerce and brought a greater share of transactions to payment companies.
Visa’s results marked the first year-over-year decline in quarterly revenue and adjusted net income since the company went public in 2008 and became the world’s largest payment network.
Net revenue fell 17 per cent to $4.84 billion, compared with an estimate of $4.83 billion from analysts.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.