Visa forecasts current-quarter profit below Street
By Amrutha Gayathri
(Reuters) - Visa Inc (V.N: Quote), the world's largest credit and debit card company, forecast profit below Wall Street expectations for the current quarter, hurt by continued pressure from lower crude prices and a strong dollar.
The company forecast third-quarter earnings per share 6-8 cents lower than analysts' expectations. Analysts on average are expecting the company to earn 65 cents per share, according to Thomson Reuters I/B/E/S.
Visa earns international transaction revenues through cross-border transactions and currency conversion, making it sensitive to foreign-exchange fluctuations.
The dollar .DXY has gained about 22 percent in the past 12 months against a basket of major currencies.
"We expect dollar strengthening and its associated impacts to continue for the balance of the year," Chief Financial Officer Vasant Prabhu said on an earnings call.
Lower oil prices also hurt the company, as customers get more gasoline for the buck, leading to a fall in the value of transactions.
Gas bills account for about 7-8 percent of Visa's U.S. transaction volume, according to analysts.
The company, which expects to return to double-digit revenue growth in the fourth quarter, said higher client incentives will also weigh on third-quarter results. Continued...