By Mehnaz Yasmin and Elizabeth Dilts Marshall
NEW YORK (Reuters) -Visa Inc beat Wall Street's quarterly estimates on Thursday as more international travel and e-commerce drove an increase spending volumes.
While travel spending has stalled since late December due to the Omicron variant of the coronavirus, Visa (NYSE:V) executives said they believe the recovery will resume and net revenue will grow in the second fiscal quarter this year.
"The upside is going to come from the continued recovery of travel and the affluent customer getting back in the mix of spending at the levels they were pre-pandemic,” Visa Chairman and Chief Executive Alfred Kelly said on a call with analysts.
The world's largest payments processor reported transactions rose 21% to $47.6 billion during the quarter compared with a year earlier.
Cross-border volumes rose 40%, marked by a steep increase in travel between September and November when the U.S. border and most of the borders within Europe reopened.
Visa's chief financial officer, Vasant Prabhu, said that even if countries reinstate border closures this year due to new COVID-19 variants, spending appears to rebound quickly when consumers can travel.
"(Open borders) can have a sizable and immediate impact," Prabhu said. "Our assumption is for steady improvement through the year."
Shares rose by as much as 2.5% in after-hours trading following the company's results.
Net revenue rose to $7.1 billion in the three months ended Dec. 31, an increase of 24% over the prior year.
Visa reported profit of $3.9 billion, or $1.81 per share.
Analysts, on average, had estimated net income of $1.70 per share, according to IBES data from Refinitiv.
Rival card companies Mastercard (NYSE:MA) Inc and American Express Co (NYSE:AXP) also reported that they beat quarterly profit estimates this week, powered by renewed consumer spending on international travel, dining and shopping.