Breaking News
Visa falls 0.6% before quarterly results beat analyst forecasts
Visa reported quarterly profit and sales above analyst estimates after shares fell 0.6% in regular trading. Because Visa earns fees on card payments, the results may offer a read on consumer spending for fund holders.
At Tuesday’s close: S&P 500 +0.60%, Nasdaq-100 +1.29%, Dow +0.03%
Quick Read
- Visa reported quarterly profit and sales above the analyst consensus, with both up from a year earlier.
- The shares fell 0.6% in regular trading before the results came out, while the S&P 500 rose 0.6%.
- Because Visa earns fees on card payments, its results may offer a read on consumer spending.
- September household spending data due Oct. 29 could add a broader view of how much people spend.
What did Visa report?
Visa (NYSE: V) reported adjusted earnings per share and sales for its latest quarter that topped the analyst consensus. The consensus is the average forecast of the analysts who cover a company.
Why it matters: Both beats were narrow. The larger change came against the same quarter a year earlier, when profit and sales were both lower.
Adjusted earnings strip out certain one-time items, so they can differ from the profit figure required under accounting rules.
How did Visa shares trade?
Visa shares fell 0.6% in regular trading on Oct. 27. They closed at $401.83, against $404.16 the session before.
The decline came before the results were released. That means the day's move does not reflect the report itself.
Visa lost about $4 billion in stock market value, leaving the company worth roughly $680 billion. The shares ended 3.0% below their 52-week high of $414.34.
Over a longer stretch, $1,000 put into Visa shares a year ago would now be worth about $1,155.
How did the wider stock market do?
Visa moved against the broader market. The S&P 500 rose 0.6%, and the tech-heavy Nasdaq-100 gained 1.3%.
A fund tracking financial stocks fell 0.3%. A fund tracking technology stocks rose 1.7%, a bigger gain than the broader market.
Why do Visa's results matter beyond the stock?
Visa runs a payment network. It earns fees when cards carrying its brand are used, so its sales tend to follow how much people and businesses spend.
Growth from a year earlier may point to steady card spending. The headline results do not show what drove that growth, such as more purchases, higher prices or more travel.
What could come next?
What’s next: It is not yet known how the shares will respond to the beat in the next regular session. Because the margins over forecasts were narrow, details beyond the headline numbers could carry weight.
The Federal Reserve announces its interest-rate decision on Oct. 28 at 2 p.m. ET, followed by the chair's press conference.
On Oct. 29 at 8:30 a.m. ET, the government releases September household income and spending data. That report may offer a broader view of consumer spending to set beside Visa's results.
For readers
What it could mean for you: People who own Visa shares directly carry the company's news in full, with no other holdings to soften it. The day's decline came before the results, so the market's first full response to the beat may arrive in the next session. Because both beats were narrow, that response could hinge on details beyond the headline numbers. Later in the week, the Fed decision and September spending data might also sway how the market values a company whose fees track card spending.
Questions and answers
Did Visa beat earnings expectations?
Yes. Visa's adjusted earnings per share and its sales both came in above the analyst consensus, though by narrow margins. Both also grew from the same quarter a year earlier.
Why did Visa stock fall on Oct. 27?
Visa shares fell 0.6% in regular trading before the company released its results. Reports gave no specific cause for the decline, and the drop does not reflect the earnings report.
What do Visa's results say about consumer spending?
Visa earns fees when its cards are used, so its sales growth may reflect how much people and businesses spend. The headline results do not show what drove that growth.
The numbers
| VISA (V) price | $401.83 |
|---|---|
| VISA (V) change | −0.58% |
| VISA (V) market value | $680 billion |
| VISA (V) 52-week high | $414.34 |
| S&P 500 change | +0.60% |
| 10-year Treasury yield | 4.99% |
Tuesday’s close
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The WallStreetDigest daily arrives at 6:15 a.m. ET every trading day.
Not investment advice.