Growth rates mentioned in the press release show that Visa is holding up during the recession. Payments volume increased 12%, total payment transactions increased 13%, and total volume increased 16%. I was a little disappointed that operational cash flow was flat, but Visa's guidance still calls for free cash flow to be in the neighborhood of $1 billion annually on a longer-term basis. That seems like a pretty tall order to me, but Visa thinks it can do it. I thought these results were great considering the challenged retail environment. This article makes the point that Visa was helped out during Q1 by international consumer activities. Although the U.S. consumer has cut back on spending, I'd have to imagine that, in theory at least, Visa will capture a lot of transactions in this country as people might be forced to use credit cards more often to manage personal cash flow. Granted, that might have been more the story when gas prices were higher and people were whipping the cards out from their wallets at the pumps (remember all those news articles about the phenomenon?). Still, I assume there will be plenty of Visa usage during the recession, for both brick-and-mortar and online purchases (in terms of the latter, you figure people will be migrating to the web to see if they can get better deals on items).

Visa is a business that will probably work well over the long term. When the economy comes back, watch out, because the stock should rise like a rocket at that point. Shorter term, the shares will be volatile. For a portfolio built on patience, Visa should perhaps be considered a candidate for addition. The world will always use plastic to pay for things. Even if the popularity of credit goes down at times, people will turn to their debit cards, and Visa will hopefully capture market share in that product category as time goes on. I wouldn't chase Visa today, but I would do some due diligence on the company and the stock after it retreats from today's excitement.

Disclosure: I don't own any company mentioned; positions can change at any time.