Consumer spending is a big focus as investors assess the economy’s health. While we’ve heard a lot from banks this earnings season, today, we received additional color from payment processors Visa and Mastercard. đŗ
First up, Visa reported earnings per share of $2.18, which topped estimates for $2.01. Revenue rose 12% to $7.9 billion, its slowest growth in seven quarters. Total payment volumes rose 7%, with total cross-border volumes increasing 22% on a constant dollar basis.
Driving that strength is the travel sector, where demand remained robust. However, executives noted that a stronger U.S. Dollar and overall macroeconomic worries could slow that growth. đĩ
Meanwhile, Mastercard earned $2.65 per share vs. the $2.58 analysts expected. And net revenues rose 12% to $5.8 billion.
Like Visa, its total cross-border volumes remained strong. However, growth came in well off its recent highs and is unlikely to accelerate, given the company said travel to most regions is back to pre-pandemic levels.Â
As a result, it now expects first-quarter revenue growth at the high end of a high single digits range. Analysts had expected 10.7% growth. đģ
Overall, it appears both companies were humming the same tune. Travel demand is waning, and a weaker macroeconomic picture will likely weigh on their 2023 results. That jives with the increased allowances for credit losses and default rates banks have reported.
As a result, both $MA and $V shares were down marginally on the day. đ
While we’re on the subject, it’s worth mentioning that Stripe is headed for the exits. The payments platform has set a one-year deadline to either go public or pursue a private market transaction. đ