Visa swung to a loss of $1.8 billion in the third quarter, as it paid its portion of a $6 billion settlement agreement with retailers that was announced earlier this month.
Excluding a litigation provision of $4.1 billion and related tax benefit, the San Francisco company reported that earnings rose to $1.1 billion, or $1.56 per diluted share, up 25% from a year earlier. That soundly beat consensus analysts' estimates of $1.45 per share, according to Thomson Reuters.
Net operating revenue grew 10%, to $2.6 billion, from the previous year, driven by growth in services and data processing. Payments volume grew 6%, to $979 billion, and the number of total processed transactions inched up 1%, to 13.1 billion.
"Visa once again reported solid global growth in payments volume, cross-border transactions and processed transactions outside the U.S., executing on our strategy of growing the electronification of payments worldwide," Joseph Saunders, chairman and chief executive officer of Visa, said in a press release Wednesday.
He added that the card network was pleased to resolve the suit with retailers in a manner that "was acceptable to most parties while ensuring the long-term health of the U.S. payments industry."
The proposed settlement would resolve a longstanding lawsuit brought by retailers against Visa, MasterCard, and a number of large banks over credit card swipe fees. Some merchants, notably Wal-Mart and Target, have opposed the terms of the settlement.
Excluding the litigation provision, Visa's operating expenses rose 10% to $1.1 billion.