By Nikhil Subba
(Reuters) - Visa Inc (N:V) reported a higher-than-expected quarterly profit, as more customers use credit and debit cards for payments, and announced a $5 billion share buyback program.
The company's payments volume rose 10.2 percent to $1.35 trillion on a constant dollar basis in the quarter ended June 30. Cross-border volumes grew 5 percent during the quarter.
"While little has changed in the global economic environment, and cross-border commerce continues to be challenged by a strong U.S. dollar, domestic consumer spend across the globe remains strong and resilient," Chief Executive Charlie Scharf said in a statement.
The company's third-quarter profit was weighed down by costs related to the acquisition of Visa Europe. Visa completed its acquisition of Visa Europe last month in a deal initially valued at as much as $23.3 billion.
The strategic rationale for merging Visa and Visa Europe does not change with or without the Brexit vote, Chief Financial Officer Vasant Prabhu said on a conference call.
Visa also said the long-term impact of Britain’s vote to leave the European Union on its business was too early to determine, although it would affect currency exchange rates in the short term.
"The Brexit vote has introduced significant uncertainty, which is never good for business sentiment," Prabhu said.
The company said it expects to take a restructuring charge in the fourth quarter to resize its global cost structure due to the Visa Europe merger.
Visa also unveiled a partnership with PayPal Holdings (O:PYPL) that will allow customers of the online payment service to pay with Visa credit cards.
Both, Visa and Mastercard have been investing heavily in their Internet operations as more consumers shop online using credit and debit cards.
Visa's net income fell to $412 million, or 17 cents per Class A share, from $1.69 billion, or 69 cents per Class A share, a year earlier.
Excluding costs related to Visa Europe, the company reported an adjusted profit of 69 cents per share.
Total operating revenue rose 3.2 percent to $3.63 billion.
Analysts on average were expecting the company to earn 66 cents per share and revenue of $3.65 billion for the quarter, according to Thomson Reuters I/B/E/S.