NEW YORK — Visa Inc. said Wednesday that its fiscal first-quarter profit rose 16 percent, as card use rose both in the U.S. and overseas.
The San Francisco-based payments processor posted a notable 10 percent increase in U.S. credit card use.
But debit card use rose just 6 percent. That's the slowest debit card growth rate in more than a year, and comes during the first three-month period that new rules were in place to limit the fees retailers pay to accept the cards.
The rules also require that starting in April, merchants get a choice on which network handles their debit transactions. In the last few months, Visa has been offering incentives to encourage stores to choose its network.
Debit growth has been slowing over the past few quarters.
"It didn't come totally out of the blue," said Edward Jones analyst Shannon Stemm. While it's still early to determine the impact of the new regulations, she noted that rival MasterCard Inc.'s results last week showed some apparent debit market share gains versus Visa, which still holds the bulk of the U.S. debit market.
Nevertheless, Visa's results for the quarter showed strong growth indicating consumers continue to shift away from cash and toward plastic and electronic payments.
Visa posted net income for the three months ended Dec. 31 of $1.03 billion, or $1.49 per share. That compares with $884 million, or $1.23 per share, in the year-earlier period. There were 4 percent fewer outstanding shares in the recent quarter due to buybacks, which increases per-share results.
Revenue for the quarter rose 14 percent to $2.55 billion, from $2.24 billion the prior year.
Analysts, on average, were expecting profit of $1.45 per share, on revenue of $2.47 billion.
Visa, the world's largest payment network, said the gains reflected higher card use, increased data processing revenue and a 19 percent boost in international transactions. It is aiming to increase its business overseas so that it eventually generates more than half of its revenue. For the quarter, international transaction revenue accounted for about 29 percent of total revenue.
The company also said its board approved another $500 million share buyback program.
Visa now expects annual revenue growth in the low double digits, which removes the lower end of its prior forecast for high-single digit to low-double digit growth. It forecast earnings per share growth in the high teens, updating its prior projection for a high single-to low-double digit range.
The results buoyed the stock. In aftermarket electronic trading, Visa shares added $3.65 to $112. The stock closed the regular session up $1.37 at $108.35.