Visa sees earnings withstanding deep recession

NEW YORK (Reuters) - Visa Inc (V.N) expects to achieve its 2009 targets for profit and operating margin despite a deepening recession, Chief Executive Joseph Saunders said on Thursday.

Speaking at the Goldman Sachs U.S. Financial Services Conference, Saunders said the world's largest card network would benefit as growth outside the United States offsets a domestic slowdown, amid a "secular shift" toward credit and debit cards and away from cash and checks.

San Francisco-based Visa on October 29 targeted annual growth of 20 percent or more in adjusted earnings per share, and adjusted operating margin in the mid-to-high 40 percent range.

"There's no question that even in the most draconian of scenarios that we will achieve our guidance," Saunders said. "We've had continued global growth in a very difficult economy."

Analysts on average expect Visa to post profit per share of $2.69 in 2009, according to Reuters Estimates.

Saunders said cardholders are keeping a tighter rein on their wallets and purses, though card usage remains strong, especially debit cards.

"It's fair to say that transaction growth remains fairly robust, though they're spending less," he said.

He added that "I'm planning for the worst, because I don't know exactly where it's going to bottom out."

Like smaller rival MasterCard Inc (MA.N), Visa is not directly exposed to rising customer defaults because it does not issue cards itself.

Large card issuers include American Express Co (AXP.N), Bank of America Corp (BAC.N), Capital One Financial Corp (COF.N), Citigroup Inc (C.N) and JPMorgan Chase & Co (JPM.N).

Shares of Visa closed Wednesday at $53.16 on the New York Stock Exchange. The company in March raised $19.7 billion in an initial public offering, with shares priced at $44 each.

(Reporting by Jonathan Stempel; editing by John Wallace)