Feb. 4 (Bloomberg) -- Visa Inc., the world’s largest electronic payments network, said profit rose 35 percent as more consumers outside the U.S. used credit and debit cards.

Net income rose to $574 million, or 74 cents a share, in the fiscal first quarter, from a pro forma $424 million a year earlier, the San Francisco-based company said today in a statement. Adjusted net income was 78 cents a share, beating the 66-cent average estimate of 22 analysts surveyed by Bloomberg. Visa rose 7.9 percent to $53 in New York trading at 5:18 p.m. after the company affirmed previous profit targets.

Visa, which collects fees to shuttle payments between financial institutions, has to overcome slipping consumer spending in the U.S. as unemployment rises and lenders pull in credit lines. Chief Executive Officer Joe Saunders said in the statement today that Visa was “steadfast” in guidance that earnings per share will rise at least 20 percent this year.

“Despite the increasingly challenging economy, processed transaction growth, the strength of debit, and the global diversity of our business continue to highlight the resilience of our business model,” Saunders said in the statement.

Sales at U.S. retailers fell in December for a record sixth consecutive month as unemployment rose to 7.2 percent, the highest rate in almost 16 years.

‘Global Diversity’

The continuing adoption of credit and debit cards worldwide has cushioned the effects of a U.S. slowdown. Spending volume rose 12 percent to $701 billion from a year earlier as the number of transactions rose 13 percent to 14.5 billion. Total operating revenue rose 17 percent to $1.7 billion.

Visa’s total volumes increased 44 percent in Central Europe, the Middle East and Africa, 27 percent in Latin America and the Caribbean and 20 percent in the Asia-Pacific region, outpacing the 7.1 percent growth in the U.S. on a constant currency basis. The company reports these figures on a three-month delay. Total Visa cards in use globally rose 10 percent to 1.7 billion.

The company expects revenue to rise in the “high single digits” this year and at the “lower end” of the 11 percent to 15 percent range next year.

Unlike rival American Express Co., Visa and No. 2 ranked MasterCard Inc. are insulated from rising defaults because they process transactions and don’t make loans to cardholders. Visa had the biggest U.S. initial public offering in March, raising more than $19 billion.

Bank Status

Lenders have reported declining profits as defaults rise, including American Express, which said fourth-quarter profit from continuing operations plunged 72 percent to $238 million.

Credit-card lenders have sought status as bank holding companies to tap the government’s rescue fund. American Express got $3.39 billion from the U.S. Treasury last month and Discover Financial Services asked for $1.2 billion.

Discover, a lender that also runs the fourth-largest credit- card network, said fiscal fourth-quarter profit more than doubled to $444 million after a settlement with MasterCard and Visa. Discover agreed in October to accept $2.75 billion to resolve an antitrust case it brought against the world’s largest credit-card networks.

Capital One Financial Corp., the Mclean, Virginia-based credit-card lender and bank, posted a surprise $1.42 billion fourth-quarter loss Jan. 22 after it added $1 billion to loss reserves. The lender expects about $8.6 billion in soured loans in the next year.

To contact the reporter on this story: Hugh Son in New York at hson1@bloomberg.net

Last Updated: February 4, 2009 18:05 EST