Visa Inc posted higher-than-expected quarterly earnings on Tuesday, as consumers used their debit cards more, and the company raised prices, sending shares up 2.4 percent.

The world's largest payment network also authorized a $1 billion share repurchase plan, and said the decline in payment volume was easing in the United States, in the first sign of stabilization on its business since the financial crisis.

Visa is partly insulated from the credit crisis because it processes transactions rather than lends funds. But the company has seen a slowdown in the growth of revenue and transaction volumes as consumers used their credit cards less.

The U.S. and rest of world are still picking themselves up from the economic storm of the past year, (but) we are beginning to see some very early signs of stabilization and some positive trends, Chief Executive Joseph Saunders said in a conference call with analysts.

We are feeling more positive about trends for the first time in a long while, Saunders said.

Net income was $514 million, or 69 cents a share, for the fourth quarter ended September 30, compared with a net loss of $356 million, or 45 cents, a year earlier.

On an adjusted basis, quarterly net income rose 23 percent to $552 million, or 74 cents per share.

That was 2 cents better than analysts average forecast of 72 cents per share, according to Thomson Reuters I/B/E/S.

Net operating revenue rose 10 percent to $1.9 billion, beating analysts estimates of $1.8 billion, helped by higher prices and higher transactions.


Total processed transactions -- which represent transactions processed by VisaNet -- increased 9 percent to 10.3 billion, but payment volume fell 2 percent for the quarter ended June 30, which translates to revenue in the following quarter.

In the United States, Visa debit volume increased 5 percent, while credit volume fell 10 percent.

Chief Financial Officer Byron Pollitt said those trends were improving, with credit card payment volume down 4 percent so far in October, and debit card volume up 11 percent.

The numbers were very strong. Revenue was clearly much stronger than people were anticipating. In the September-October time frame we have seen some modest pick up in volumes, which is encouraging, so overall these are pretty good news, said Greg Smith, an analyst at the investment bank Duncan Williams.

The payment network reiterated net revenue growth at the lower end of the 11 percent to 15 percent range in its fiscal 2010 year, and annual diluted class A common stock earnings per share growth of more than 20 percent.

Visa forecast marketing expenses of less than $1 billion in 2010, and capital expenditures in the $200 million to $250 million range, up to one-third less than in 2009.

The company also estimated earnings per share will rise more than 20 percent in its 2011 fiscal year.

There aren't many companies giving two years of forward guidance right now, so that really demonstrates the visibility of their business model, Smith said.

Visa's shares were up 2.4 percent at $75.69 in after-hours trade, after closing up 1.54 percent on the New York Stock Exchange.

(Reporting by Juan Lagorio, editing by Leslie Gevirtz)