Was waiting on AXP to report before lookin at options.... and since they missed i expect them too.http://online.wsj.com/article/BT-CO-...23-715172.html
Visa and MasterCard make money from the fees they charge banks including JPMorgan Chase & Co. (JPM) and Citigroup (C), to process card payments on the plastic these banks issue. These three financial institutions are the top issuers of MasterCard- and Visa-branded cards. The more consumers charge on their MasterCard and Visa plastic, the more these two companies earn by way of fees.
Therefore, as economic woes broadened, consumer spending slowed, eating into the fees Visa and MasterCard earn from transactions. Recent data indicate that the slowdown in retail spending is decelerating. For instance, the amount charged by borrowers using plastic issued by JPMorgan Chase declined 16.3% in the second quarter from a year ago, according to a July 17 KBW report. But the pace of decline slowed from the earlier quarter in which the amount borrowers charged on their credit cards was 16.4% less than a year earlier.
Visa - reports July 29.
MARKET EXPECTATIONS: Analysts polled by Thomson Reuters expect quarterly earnings of 64 cents a share on revenue of $1.64 billion for Visa's fiscal third quarter. A year ago, the company reported earnings of 59 cents a share on revenue of $1.64 billion. The quarter that ended June 30 will be the company's sixth as a public company.
In this environment, Visa has an edge over rival MasterCard because it has a larger market share in debit cards, which are used more frequently than credit cards for non-discretionary expenses such as groceries, dry cleaning and gasoline. In an economic downturn, consumers rein in discretionary expenditures, such as flat-screen televisions, typically charged to credit cards.
After going public in March 2008 in a $19.65 billion initial public offering, the largest in U.S. history, Visa shares more than doubled in value, soaring above their IPO price of $44. But shares have since fallen as the credit crisis intensifies, and closed at $66.85 Wednesday.