Visa’s quarterly profit rose 11 percent as consumer spending grew on the credit- and debit-card processor’s massive payment network.
Visa said Thursday it earned $1.57 billion, or $2.53 per share, in the October-December quarter. That compares with a profit of $1.41 billion, or $2.20 per share, in the same period a year ago.
Revenue was $3.38 billion, up from $3.16 billion.
Analysts surveyed by FactSet expected Visa to earn $2.49 per share on $3.34 billion in sales.
Visa, and its competitor MasterCard, do not issue credit and debit cards directly. Instead, the two companies operate payment networks that banks and merchants sign up to use, and in exchange Visa and MasterCard take a percentage of each sale as a fee.
However, since the companies are directly exposed to spending trends, the companies function as barometers for the health of the U.S. consumer.
Visa said it processed $1.2 trillion in payments on its network in the latest quarter, up 11 percent compared to a year ago. Most of the growth was in the U.S., where payment volumes were $651 billion in the quarter, compared with $591 billion in the same period a year ago.
Visa’s results echoed similar comments from American Express, which operates its own payment network and also issues its own branded credit cards. American Express said last week it saw a notable uptick in consumer spending late last year.
Visa also announced a 4-for-1 stock split on Thursday, effective March 19.
Visa said that its shareholders will receive three additional shares for each share they own as of February 18. Based on the close of Visa’s stock Thursday at $248, the new shares will be worth $62 each.
Visa did not give a reason for the stock split. However, Visa’s stock is the most expensive of the 30 companies that make up the Dow Jones Industrial Average, and among the most expensive in the Standard & Poor’s 500 index.
The stock split will have a direct impact on the Dow’s trading behavior, because of a quirk in how the Dow index is calculated. The Dow is a price-weighted stock index, which means more-expensive stocks can move the Dow more than less-expensive ones.
The Dow’s calculation makes Visa, at $248 a share and a $164 billion market capitalization, a more influential stock than General Electric, which is $24.08 a share but has a $241 billion market worth.
By contrast, the S&P 500 uses market capitalization to calculate its value, which is why Wall Street uses the index as a more accurate gauge of the U.S. stock market.
After the stock split, Goldman Sachs will be the most expensive member of the Dow, at a value of $175.99 per share as of Thursday.