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Visa Posts Record Profit on Higher Spending


Visa Inc. reported record quarterly profit and processed more than $3 trillion in transactions, a record for the quarter, driving a 10% revenue growth.

Still, revenue and net income fell slightly short of Wall Street projections, according to FactSet, even as per-share profit matched expectations.

Shares, which have been trading near record levels, closed Thursday at $208.21 and fell 3% to $201.61 in after-hours trading.

Overall, Visa’s first-quarter profit rose 10% to $3.27 billion, or $1.46 a Class A share, the company said Thursday. Net revenue rose 10% to $6.05 billion.

Analysts expected $1.46 a share on $6.08 billion.

Higher spending has helped credit-card companies post record results.

Mastercard Inc.

and

American Express Co.

this month also reported quarterly results that beat analysts’ projections, though

Discover Financial Services

’ revenue results for the most recent quarter fell slightly shy of targets.

The company’s board approved an additional $9.5 billion to buy back stock, adding to the roughly $1.7 billion left as of Dec. 31 from a previous authorization, Visa said.

Payments volume, adjusted for foreign-currency fluctuations, rose 8%. Meanwhile, volume from cross-border transactions, which typically carry larger fees, rose 9%.

The San Francisco-based company paid $1.75 billion during the quarter in client incentives, or long-term contracts with merchants, clients and other partners to expand its network and payment volume.

This year Visa projects incentives to eat away about 22.5% to 23.5% of gross revenue.

Visa is the largest U.S. card network, and its clients have largely included banks that issue credit and debit cards. This month, it made a big bet on digital payments with a roughly $5.3 billion deal to buy Plaid Inc., which connects apps like mobile-payment services Venmo and robo adviser Betterment to users’ bank accounts.

“We see it as a natural extension of our network of networks,” Chief Executive

Al Kelly

said Tuesday at the annual shareholders’ meeting.

The company still expects per-share profit for the year to increase by a midteen percentage and revenue to increase by a low double-digit percentage. The Plaid acquisition isn’t factored into the guidance, the company said.

Company officials said it was too early to estimate the impact from a deadly virus outbreak in China. The World Health Organization on Thursday declared the outbreak a public health emergency of international concern, which recognizes that international public-health authorities consider the respiratory virus a significant threat beyond China and seeks to gain political and financial support to stop it.

Write to Maria Armental at maria.armental@wsj.com

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