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Dow Jones Rebounds as Visa and Amgen Report Strong Results

By Timothy Green – Updated Oct 29, 2020 at 5:28PM

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Visa is growing payment volumes again, and Amgen reported a double-digit sales increase.

The Dow Jones Industrial Average (^DJI -0.54%) rebounded on Thursday after a brutal Wednesday sell-off, and was up 0.52% at the close. Nothing has changed about the pandemic, with cases continuing to surge in the U.S. and Europe, so increased volatility in the coming months is a real possibility.

Shares of Visa (V -0.41%) and Amgen (AMGN -1.55%) rode the market higher on Thursday after both companies reported quarterly results that beat analyst expectations. Visa is seeing payment volumes recover, and Amgen posted strong growth for some of its newer products.

A Wall Street street sign.

Image source: Getty Images.

Payments volume rises for Visa

Cross-border volumes for credit card giant Visa were still deeply depressed in its fiscal fourth quarter, down 29% year over year, and down 41% excluding transactions within Europe. This decline led total revenue to slump 17%, and it pushed adjusted earnings per share down 23%.

But a 3% jump in processed transactions, much better than the 13% decline recorded in the fiscal third quarter, helped the company beat analyst expectations. Total revenue of $5.1 billion was about $70 million ahead of the average analyst estimate, while adjusted EPS beat by $0.02. Payments volume was up 4%, although service revenue is recognized based on payments volume in the previous quarter.

Growth in e-commerce is helping Visa offset the weakness in cross-border spending. The company is seeing elevated growth in volumes for card-not-present transactions excluding travel. Card-present spending is recovering, albeit gradually.

Visa opted to not provide any guidance for fiscal 2021 due to the uncertainty related to the coronavirus pandemic. Some countries in Europe have put new lockdown orders in place, and confirmed cases in the U.S. are near record levels. A strong winter wave of the virus, a historically weak economy, and a lack of new economic stimulus in the near term will all work against Visa's recovery.

Shares of Visa were up about 2.2% at the close on Thursday. The stock is down slightly since the start of the year.

Amgen beats estimates

Biotech giant Amgen reported a 12% jump in revenue to $6.4 billion for the third quarter, with higher volume overcoming lower selling prices and negative impacts from the pandemic. Volume growth hit 18% thanks to newer products like Otezla, and despite slumping volumes for some products affected by the pandemic and generic competition. Amgen's revenue beat analyst expectations by about $40 million.

The pandemic continued to act as a headwind for physician-patient interactions and prescribing volumes, although both increased in the third quarter. Prescription trends became more consistent in the third quarter, but the company expects variability due to the pandemic.

A significant chunk of Amgen's sales growth came from the $538 million generated by Otezla, which the company acquired last year. Other strong growers included Prolia, Repatha, Amgevita, and Neupogen.

Profits tracked higher along with revenue. Amgen produced adjusted EPS of $4.37, up 19% year over year and $0.62 higher than analysts were expecting. The company narrowed its full-year revenue outlook to a range of $25.1 billion to $25.5 billion, and it raised its adjusted EPS outlook to a range of $15.80 to $16.15.

Shares of Amgen were up about 0.7% on the day. The stock is down roughly 9% in 2020.

Tim Green has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Visa. The Motley Fool recommends Amgen.The Motley Fool has a disclosure policy

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