(Reuters) - Visa Inc <V.N>, the world's largest payments network operator, on Thursday reported a better-than-expected quarterly profit and raised its annual earnings forecast, as more people across the United States and Europe used its payments network.
Visa, which generates revenue by facilitating credit- and debit-card transactions, has benefited from increased consumer spending in the United States as well as results from Visa Europe, which it bought last June for about $23 billion.
Visa's U.S. payments volume rose 12.1 percent on a constant dollar basis to $840 billion in the third quarter ended June 30. More than half its total volume of transactions comes from the United States.
Visa Europe generated $371 billion in payments volume. Results from the Europe unit are not part of Visa's prior-year quarter.
San Francisco-based Visa also raised its forecast for full-year earnings and revenue. The company said it now expects annual adjusted earnings per share to grow about 20 percent, up from an earlier expectation of growth in the mid-teen percentage digits.
Visa forecast net revenue to rise about 20 percent in the year ending September 30, having earlier expected a 16 to 18 percent increase.
The company's forecast was boosted by strong growth in cross border volumes, Chief Financial Officer Vasant Prabhu said on a call with analysts.
Cross-border volumes — the value of transactions made outside of the United States — climbed 11 percent in the third quarter when adjusted to include Visa Europe's results in the year-ago quarter.
Prabhu said Visa benefited from a "sharp increase" in cross-border commerce into the United Kingdom due to a weaker pound following Britain's vote to leave the European Union.
Net income rose to $2.06 billion, or 86 cents per Class A share in the quarter, from $412 million, or 17 cents per Class A share.
Analysts on an average had expected earnings of 81 cents, according to Thomson Reuters I/B/E/S.
Results in the prior-year quarter included expenses of nearly $1.9 billion related to Visa's purchase of Visa Europe.
Operating revenue jumped 26 percent to $4.57 billion, edging past analysts' estimates of $4.36 billion.
Shares of Visa were up 1 percent at $99.12 in trading after the bell.
(Reporting by Nikhil Subba in Bengaluru; Editing by Sai Sachin Ravikumar)