Latest news with #travel demand
Reuters
2 days ago
- Business
- Reuters
PREVIEW Visa, Mastercard set for higher profits on solid spending trends
July 29 (Reuters) - Visa (V.N), opens new tab and Mastercard (MA.N), opens new tab are expected to report higher quarterly profits this week on steady consumer spending, and analysts will scrutinize how demand for travel and discretionary purchases is shaping up in the face of tariff uncertainty. The results from the world's biggest payment processors will help flesh out the broader financial outlook that major banks such as JPMorgan Chase (JPM.N), opens new tab and Wells Fargo (WFC.N), opens new tab presented earlier this month, signaling a resilient consumer. "Visa and Mastercard remain top ideas, particularly in an uncertain macro environment, given their broad-based exposure to discretionary and non-discretionary spend, geographic reach, and proven ability to stabilize their expense increase in downturns," Oppenheimer analysts said in a note. Billions of people worldwide use Visa and Mastercard for their everyday spending and other purchases, making the card networks better equipped to weather downturns. They also have more expense flexibility to support profit growth. In recent years, the companies have diversified their business model by building out value-added services such as threat intelligence and fraud reduction. Still, some analysts expect a potential spending slowdown in the back half of 2025. Cross-border travel, a high-margin business for payments companies, has come under some pressure due to trade tensions and geopolitical risks. Slower travel from Canada to the U.S. and fresh tensions in the Middle East in June have raised concerns over a potential drag on growth. Analysts will also examine whether elevated volumes are being driven by a pull-forward in spending, as consumers pre-purchase goods they expect to get costlier after tariffs are imposed. In the second quarter, total card spending volumes modestly increased across bank issuers. Across credit and debit cards, Bank of America (BAC.N), opens new tab showed an increase of 110 basis points, while JPMorgan Chase showed a 40 bps rise, according to data compiled by RBC Capital Markets. "On balance and relative to expectations, data seems neutral for the networks and acquirers, considering overall spending trends appear at least stable compared to last quarter's growth, which we think should be good enough considering the macroeconomic volatility since last quarter's earnings," J.P. Morgan analysts said in a note. Investors will also zero in on the forecast around stablecoins. While both the card giants plan to launch products linked to the cryptocurrency, the recent passing of the Genius Act has raised some concern that stablecoins could eliminate the need for payment intermediaries in the long term. Visa, the larger of the two by market value, will announce quarterly results after markets close on Tuesday, while Mastercard will report on Thursday. American Express (AXP.N), opens new tab surpassed quarterly profit expectations earlier this month, helped by resilient spending by its affluent customer base. Visa and Mastercard shares have gained nearly 13% and 8% year-to-date as of Friday's close, respectively, while the benchmark S&P 500 index (.SPX), opens new tab has gained 8.6%. Source: LSEG, Company Statements
CTV News
3 days ago
- Business
- CTV News
Visa, Mastercard set for higher profits on solid spending trends
Visa and Mastercard are expected to report higher quarterly profits this week on steady consumer spending, and analysts will scrutinize how demand for travel and discretionary purchases is shaping up in the face of tariff uncertainty. The results from the world's biggest payment processors will help flesh out the broader financial outlook that major banks such as JPMorgan Chase and Wells Fargo presented earlier this month, signaling a resilient consumer. 'Visa and Mastercard remain top ideas, particularly in an uncertain macro environment, given their broad-based exposure to discretionary and non-discretionary spend, geographic reach, and proven ability to stabilize their expense increase in downturns,' Oppenheimer analysts said in a note. Billions of people worldwide use Visa and Mastercard for their everyday spending and other purchases, making the card networks better equipped to weather downturns. They also have more expense flexibility to support profit growth. In recent years, the companies have diversified their business model by building out value-added services such as threat intelligence and fraud reduction. Still, some analysts expect a potential spending slowdown in the back half of 2025. Cross-border travel, a high-margin business for payments companies, has come under some pressure due to trade tensions and geopolitical risks. Slower travel from Canada to the U.S. and fresh tensions in the Middle East in June have raised concerns over a potential drag on growth. Analysts will also examine whether elevated volumes are being driven by a pull-forward in spending, as consumers pre-purchase goods they expect to get costlier after tariffs are imposed. In the second quarter, total card spending volumes modestly increased across bank issuers. Across credit and debit cards, Bank of America showed an increase of 110 basis points, while JPMorgan Chase showed a 40 bps rise, according to data compiled by RBC Capital Markets. 'On balance and relative to expectations, data seems neutral for the networks and acquirers, considering overall spending trends appear at least stable compared to last quarter's growth, which we think should be good enough considering the macroeconomic volatility since last quarter's earnings,' J.P. Morgan analysts said in a note. Investors will also zero in on the forecast around stablecoins. While both the card giants plan to launch products linked to the cryptocurrency, the recent passing of the Genius Act has raised some concern that stablecoins could eliminate the need for payment intermediaries in the long term. Visa, the larger of the two by market value, will announce quarterly results after markets close on Tuesday, while Mastercard will report on Thursday. American Express surpassed quarterly profit expectations earlier this month, helped by resilient spending by its affluent customer base. Visa and Mastercard shares have gained nearly 13 per cent and eight per cent year-to-date as of Friday's close, respectively, while the benchmark S&P 500 index has gained 8.6 per cent. Company EPS estimates Year-ago Visa US$2.85 US$2.42 Mastercard US$4.03 US$3.59 (Reporting by Pritam Biswas and Arasu Kannagi Basil in Bengaluru; Editing by Devika Syamnath)
Reuters
3 days ago
- Business
- Reuters
Visa, Mastercard set for higher profits on solid spending trends
July 28 (Reuters) - Visa (V.N), opens new tab and Mastercard (MA.N), opens new tab are expected to report higher quarterly profits this week on steady consumer spending, and analysts will scrutinize how demand for travel and discretionary purchases is shaping up in the face of tariff uncertainty. The results from the world's biggest payment processors will help flesh out the broader financial outlook that major banks such as JPMorgan Chase (JPM.N), opens new tab and Wells Fargo (WFC.N), opens new tab presented earlier this month, signaling a resilient consumer. "Visa and Mastercard remain top ideas, particularly in an uncertain macro environment, given their broad-based exposure to discretionary and non-discretionary spend, geographic reach, and proven ability to stabilize their expense increase in downturns," Oppenheimer analysts said in a note. Billions of people worldwide use Visa and Mastercard for their everyday spending and other purchases, making the card networks better equipped to weather downturns. They also have more expense flexibility to support profit growth. In recent years, the companies have diversified their business model by building out value-added services such as threat intelligence and fraud reduction. Still, some analysts expect a potential spending slowdown in the back half of 2025. Cross-border travel, a high-margin business for payments companies, has come under some pressure due to trade tensions and geopolitical risks. Slower travel from Canada to the U.S. and fresh tensions in the Middle East in June have raised concerns over a potential drag on growth. Analysts will also examine whether elevated volumes are being driven by a pull-forward in spending, as consumers pre-purchase goods they expect to get costlier after tariffs are imposed. In the second quarter, total card spending volumes modestly increased across bank issuers. Across credit and debit cards, Bank of America (BAC.N), opens new tab showed an increase of 110 basis points, while JPMorgan Chase showed a 40 bps rise, according to data compiled by RBC Capital Markets. "On balance and relative to expectations, data seems neutral for the networks and acquirers, considering overall spending trends appear at least stable compared to last quarter's growth, which we think should be good enough considering the macroeconomic volatility since last quarter's earnings," J.P. Morgan analysts said in a note. Investors will also zero in on the forecast around stablecoins. While both the card giants plan to launch products linked to the cryptocurrency, the recent passing of the Genius Act has raised some concern that stablecoins could eliminate the need for payment intermediaries in the long term. Visa, the larger of the two by market value, will announce quarterly results after markets close on Tuesday, while Mastercard will report on Thursday. American Express (AXP.N), opens new tab surpassed quarterly profit expectations earlier this month, helped by resilient spending by its affluent customer base. Visa and Mastercard shares have gained nearly 13% and 8% year-to-date as of Friday's close, respectively, while the benchmark S&P 500 index (.SPX), opens new tab has gained 8.6%. Source: LSEG, Company Statements
Reuters
23-07-2025
- Business
- Reuters
Southwest Airlines misses Q2 profit estimates as US travel demand wavers
July 23 (Reuters) - Southwest Airlines (LUV.N), opens new tab posted second-quarter profits that missed Wall Street estimates on Wednesday, hurt by weak travel demand in the domestic market. Lingering uncertainty about the broader economy and rising living costs in the aftermath of President Donald Trump's trade war have taken a toll on carriers that primarily service the U.S. domestic market and price-sensitive customers. To stimulate demand, they have been leaning on fare discounts. Southwest's shares were down 2% after the bell. The company said it expects $600 million-$800 million in earnings before interest and taxes this year, less than half its previous forecast of $1.7 billion. Still, Southwest said domestic leisure travel demand has stabilized and is showing signs of improvement. Southwest said its unit revenue, or revenue generated from each seat, in the current quarter is expected to be in the range of down 2% to up 2% from a year ago. In April, several major U.S. carriers scrapped their financial forecasts, citing uncertainty linked to President Donald Trump's broad tariff measures and government spending cuts, which pressured consumers to scale back travel plans. Since then, airline executives and analysts have signaled that demand trends and the broader travel environment are showing signs of steadiness. Even so, the domestic market remains under pressure, with cost-conscious travelers remaining cautious as household budgets tighten. Summer, typically the peak money-making season for airlines, is falling short this year as sluggish demand for standard economy seats forces carriers to cut fares, undermining their pricing power. Delta Air Lines (DAL.N), opens new tab and United Airlines (UAL.O), opens new tab have seen strong revenue gains from premium cabins, buoyed by affluent travelers willing to pay for upgrades. By contrast, low-fare carriers such as Southwest are under pressure to maintain profitability as price-sensitive travelers remain cautious with discretionary spending. Southwest reported an adjusted profit per share of 43 cents, compared with analysts' average expectations of 51 cents, according to data compiled by LSEG. It reported operating revenue of $7.24 billion in the quarter through June, compared with $7.35 billion a year earlier.
Skift
16-07-2025
- Business
- Skift
United Lowers Profit Forecast Despite Less Economic and Geopolitical Uncertainty
There were some bright spots in the report, including higher revenue from premium passengers. But the Newark Airport issues still linger and the focus will be on the overall drop in the earnings outlook. United Airlines is lowering its profit forecast for 2025, but noted that it is seeing travel demand pick up in the second half of the year following concerns that economic uncertainty would slow the industry's momentum. United now expects earnings per share for the year to range from $9 to $11, down from the previous forecast of $11.50 to $13.50 in a "stable" economic environment. Last quarter, United
