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Visa tops earnings expectations and adds $8 billion to buyback program

Visa Inc. topped earnings and revenue expectations Thursday amid strong debit-card and online-shopping trends, and the payments giant also announced a new $8 billion buyback program.

The company reported fiscal first-quarter net income of $3.13 billion, or $1.42 a share, down from $3.27 billion, or $1.46 a share, in the year-earlier quarter. On an adjusted basis, Visa V, +1.67% also earned $1.42 a share, down from $1.46 a share a year earlier but above the $1.28 a share that analysts surveyed by FactSet had been projecting.

Visa’s revenue for the fiscal first quarter dipped to $5.69 billion from $6.05 billion, while analysts were calling for $5.52 billion.

Shares were up 1.8% in after-hours trading Thursday.

“We saw sustained strength of debit and e-commerce volumes as well as resilient domestic spending in most countries,” Chief Executive Al Kelly said in Visa’s earnings release. Revenue from value-added services accelerated in the quarter, he added.

Payment volume for the quarter grew 5%, though cross-border volume declined 21% due to depressed international travel trends during the COVID-19 crisis. When excluding cross-border transactions between European countries, cross-border volume decreased 33%.

Visa said that on Jan. 26 its board of directors approved an additional $8 billion in stock buybacks. The company had $3.6 billion remaining on its previous buyback authorization as of Jan. 1.

The company declined to give a formal financial outlook in its release, citing uncertainty brought on by the pandemic.

The report follows one from fellow payments giant Mastercard Inc. MA, +2.79% earlier in the day. Mastercard pointed to strong adoption of contactless payments, though the company’s results were also weighed down by depressed global travel.

Visa shares have lost 9.4% so far this year as the Dow Jones Industrial Average DJIA, +0.99% has been flat.

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