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European expansion, payments growth help Visa beat earning expectations

  • Visa shares have gained more than 25 percent so far this year.
  • The payments company has been trying to expand its reach into Europe.

Visa reported earnings that beat analysts' expectations Thursday after the bell.

Here's how the company did compared with what Wall Street expected:

  • EPS: 86 cents vs. 81 cents, according to Thomson Reuters
  • Revenue: $4.57 billion vs. $4.36 billion, according to Thomson Reuters

Last year, Visa reported earnings per share of 17 cents on $3.63 billion in revenue. This year's revenue figure represents a 26 percent year-over-year increase.

The company attributed the increase to the inclusion of Europe, growth in payments volume, cross-border volume and processed transactions.

Payments volume growth increased to 38 percent to $1.9 trillion from the year-earlier quarter. CEO Alfred Kelly said on a conference call following the earnings release that volume was "solid" across all five regions covered, but growth was "particularly strong" in India, the U.S., Russia, Mexico and Australia.

"As you know, our largest presence by quite a large measures in the U.K. has held up well," Kelly said, citing benefits from the lower value of the pound driving lots of traffic into the country.

Visa's stock was up more than 1 percent after hours following the announcement.

Visa reaffirmed its outlook for the rest of the year. Starting next quarter, reported growth rates will include Visa Europe and Costco in prior-year numbers, CFO Vasant Prabhu said on a call with investors.

On Tuesday, Visa announced it would expand its PayPal partnership to Europe. The two companies already collaborate in the U.S. and Asia Pacific.

The PayPal announcement represents Visa's latest push into Europe. Visa decided last month to invest in Klarna, a Swedish online payment company. Last quarter, Visa said the closing of its acquisition of Visa Europe continued to drive strong revenue growth.

Visa shares hit an intraday all-time high on Wednesday, trading at levels not seen since its initial public offering in March of 2008. The company's stock has gained more than 25 percent this year, outperforming the Dow Jones industrial average's 9 percent gains.

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