Visa Inc., the biggest payments network, climbed the most in 21 months and reached a record high after quarterly profit beat analysts' estimates amid increased credit- and debit-card spending.
Visa's shares rose 6.2 percent to $176.34 at 10:37 a.m. in New York, the biggest intra-day jump since August 2011 and the highest price since its stock was first sold to the public in 2008. Fiscal second-quarter net income fell 1.7 percent to $1.27 billion, or $1.92 a share, beating the $1.81 average estimate of 32 analysts surveyed by Bloomberg. Net income a year earlier was helped by a one-time tax-related gain of $208 million.
Visa, led by Chief Executive Officer Charlie Scharf, increased dividends and stepped up stock repurchases as the firm gained financial flexibility after joining rival MasterCard Inc. in agreeing to a multibillion-dollar settlement with merchants over card swipe fees. Foster City, California-based Visa also reached a deal in February with JPMorgan Chase & Co., the biggest U.S. card lender, to let the bank tailor payment solutions for merchants.
"Visa reported surprisingly strong F2Q13 results," Tien- Tsin Huang, an analyst at JPMorgan wrote in a note to clients. Revenue was $100 million more than Huang had predicted, which was "the largest revenue beat ever."
Visa's total operating revenue climbed 15 percent to $2.96 billion, surpassing the $2.85 billion estimate of analysts surveyed by Bloomberg.
"The No. 1 opportunity for us is to move transactions from cash onto our electronic platform," Scharf, 48, said yesterday on a conference call with analysts. "The ecosystem is evolving and we need to evolve as well to make sure that we remain competitive."
The shares had climbed 9.5 percent this year through yesterday, outpacing the 4.2 percent advance for the 70-company Standard & Poor's 500 Information Technology Index.
The payment processor raised its forecast for adjusted annual earnings-per-share growth to about 20 percent, from the "high teens" projected in February.
MasterCard, the world's second-largest payments network by processed transactions, said yesterday that first-quarter profit increased 12 percent to $766 million. Revenue at the Purchase, New York-based firm climbed 8.4 percent to $1.91 billion, short of the $1.93 billion estimate of analysts in a Bloomberg survey. The stock fell 2.4 percent to $539.82 yesterday.
Worldwide spending on Visa payment cards climbed 8.8 percent to $1.03 trillion, adjusted for currency fluctuations, according to the statement. Processed transactions rose 6.2 percent to 13.9 billion. Cross-border volume, a measure of spending by cardholders outside their home countries, advanced 10 percent.
Spending on Visa debit cards in the U.S. rose 0.3 percent to $285 billion, the first increase in a year, according to the statement. U.S. credit-card purchases climbed 9.1 percent to $244 billion.
U.S. consumer spending, which accounts for about 70 percent of the nation's economy, cooled in March after higher payroll taxes took effect in January. Scharf seeks to bolster Visa's growth outside the U.S. as the company has said it hopes to get more than half of its revenue abroad by 2015.