Economy

Visa 4Q profit down 28 pct on large tax provision

Visa Inc.'s fourth-quarter net income fell 28 percent as it set aside money for taxes, and it said it's making its plans based on a slow recovery of the U.S. economy.

The world's largest processor of debit and credit card payments said payments on its system rose 13 percent to $1.1 trillion for the quarter. Visa's results are closely watched because they can be a window into the buying habits and financial health of consumers.

Growth in the number of U.S. transactions slowed from August into September, showing constrained consumer spending, Chief Financial Officer Byron Pollitt said on a conference call. The company is assuming "a tepid recovery in U.S. economic growth," he said.

Visa's observations dovetail with economic reports that showed employers adding fewer jobs in September than in August. "We do expect one day to benefit from stronger economic growth, we just don't know when yet," CEO Charlie Scharf said.

Net income fell 28 percent to $1.19 billion, or $1.86 per share, for the three months that ended Sept. 30, from $1.66 billion, or $2.48 per share, last year. The results topped analysts' expectations by a penny, according to FactSet.

Revenue rose almost 9 percent to $2.97 billion, a little less than the $3.02 billion analysts expected. The company set aside $574 million for taxes, after benefiting from a $74 million tax gain last year.

Visa left its guidance for the upcoming year unchanged. Shares of Visa, based in Foster City, Calif., fell 42 cents to close at $203.82 on Wednesday. They dropped an additional $5.13, or 2.5 percent, to close at $198.69 in after-hours trading.

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