Visa 2Q profits jump, helped by more spending on its network

Ken Sweet, AP Business Writer

FILE- In this April 23, 2018, file photo, the logo for Visa appears above a trading post on the floor of the New York Stock Exchange. Visa Inc. reports earnings Wednesday, April 25. (AP Photo/Richard Drew, File)

NEW YORK (AP) -- Payment processing giant Visa on Wednesday reported a sharp jump in its fiscal second-quarter profits from a year earlier on Wednesday, as more shoppers spent money on Visa's network across all its major markets.

The San Francisco-based company said it earned $2.61 billion in the period ending March 30, or $1.11 a share. The company's net income rose by 26 percent when a one-time charge tied to the purchase of Visa Europe is excluded from the year-ago results.

Visa's profit beat the expectations of analysts, who forecast earnings of $1.01 a share, according to FactSet.

Spending across Visa's namesake network rose 11 percent to $2.716 trillion in the quarter. As a payment processor, Visa earns a small fee from each transaction run on its network. The total number of cards issued on Visa's network grew to 3.25 billion from 3.13 billion a year earlier.

"Visa had a terrific second quarter," CEO Alfred Kelly said in a statement. "Revenue growth was better than anticipated and many of our key business drivers accelerated compared from the first quarter."

Like other companies, Visa now expects to pay significantly less tax going forward due to the new tax law signed by President Donald Trump. Visa expects its effective tax rate to be 20 to 22 percent, down six percentage points from what it previously paid.