(Reuters) - Visa Inc (V.N), the world's largest credit and debit card company, reported a better-than-expected quarterly profit on Thursday as a strengthening U.S. job market and cheaper gasoline prices encouraged people to spend.
The company said e-commerce, which mainly uses cards, was "extraordinarily strong during the holiday season."
But Chief Executive Charlie Scharf said consumer spending on the whole, while at "reasonable" levels, was not accelerating.
Shares of the company, which also announced a 4-for-1 split of its class A common stock, rose about 4 percent in extended trading.
Visa, which earns money from both the volume and value of transactions using its cards, said total volume increased to $1.90 trillion from $1.84 trillion.
The company stands to benefit from China's recent decision to allow foreign card networks to clear domestic transactions, but Scharf said it remained unclear when the Chinese market would actually open and what the rules would look like.
Visa lost its right to process domestic payments in Russia in the middle of last year when Moscow hit back after the imposition of Western sanctions over its role in Ukraine.
Visa reaffirmed its revenue and margin forecasts for 2015 after taking into account an expected 2 percentage point negative impact from changes in foreign exchange rates.
About 60 percent of Visa's transaction volumes are outside the United States.
"The stronger-than-anticipated U.S. dollar has led to substantially reduced travel into the U.S. from Europe, Canada, and Latin America," Chief Financial Officer Byron Pollitt said on a conference call with analysts.
Visa, a Dow Jones Industrial Average component, recorded cross-border volume growth of 8 percent on a constant dollar basis, down from 12 percent in the year-earlier quarter.
The company's net income rose to $1.57 billion, or $2.53 per Class A share, in the quarter ended Dec. 31 from $1.41 billion, or $2.20 per Class A share, a year earlier.
Analysts on average had expected earnings of $2.49 per share on revenue of $3.34 billion for the company's first fiscal quarter, according to Thomson Reuters I/B/E/S.
Total operating revenue rose 7 percent to $3.38 billion.
Up to Thursday's close of $248, Visa's shares had gained about 15.5 percent since it last reported earnings on Oct. 29. The Dow Jones Industrial average .DJI rose about 2.6 percent in the same period.
Reporting by Amrutha Gayathri in Bengaluru; Editing by Savio D'Souza and Ted Kerr