(Reuters) - Visa Inc, the world’s largest credit and debit card company, cut its revenue forecast for the year, as growth in cross-border transactions slowed amid a strengthening of the U.S. dollar.
The company’s shares were down 2.9 percent at $214.75 in extended trading. Visa, which gets about 60 percent of its total transaction volume from outside the United States, cut its full-year revenue growth forecast to 9-10 percent from 10-11 percent.
International transaction revenue rose less than 1 percent to $854 million in the latest quarter.
Wedbush Securities Inc analyst Gil Luria said Visa’s international transaction revenues was growing at the lowest rate since the financial crisis.
“Service revenue and processing revenue growth was adequate. It’s more the international revenue, the cross border transaction, that took a step down this quarter,” Luria said.
The U.S. dollar held near eight–month highs against the euro on Wednesday as worries over tougher sanctions on Russia and their potential impact on fragile euro zone growth weighed on the single currency.
Chief Financial Officer Byron Pollitt said on a conference call that he anticipates some loss from processing revenue in Russia, where new laws have made it costlier for foreign card companies to operate in the country.
Visa and rival MasterCard Inc had considered quitting the Russian market after President Vladimir Putin signed a new law that would have forced the two companies to deposit a collateral of $2.9 billion to continue operating in the country.
However, officials have shown willingness to relax the requirements and said if the two companies can find local processing partners by the end of October, they may be able to avoid paying the collateral.
Russia accounts for 2 percent of Visa’s total revenue, most of it coming from cross border transactions, and the recent actions by Russia target Visa’s domestic business.
Visa’s net income rose to $1.36 billion, or $2.17 per Class A share, in the third quarter ended June 30 from $1.23 billion, or $1.88 per Class A share, a year earlier.
Total operating revenue rose 5.1 percent to $3.16 billion.
Analysts on average had expected a profit of $2.10 per share on revenue of $3.15 billion, according to Thomson Reuters I/B/E/S.
Visa’s payment volumes on a constant dollar basis rose 11.5 percent to $1.19 trillion in the quarter.
Reporting by Tanya Agrawal and Amrutha Gayathri in Bangalore; Editing by Robin Paxton and Don Sebastian