Visa's Earnings Cheer: "Charge!" (V)

Credit card clearing and processing giant Visa Inc. (NYSE: V) just posted earnings with an adjusted $0.59 EPS on $1.6 Billion in revenues.  First Call had estimates pegged at $0.48 EPS on $1.55 Billion.  Even if you use GAAP estimates for financials, the company posted $0.51 EPS.

Despite a weak consumer, which everyone believes Visa is immune from entirely, Visa is raising its 2008 targets.  Its sees adjusted operating margin in the mid-40% range.  The company is going out on a limb and calling for 2009 and 2010 to see adjusted operating margins in the mid to high 40% range.

Through 2010 the company is targeting annual revenue growth of 11% to15% and is calling for earnings per share growth of some 20% for thesame period.  Also through 2010, we are seeing annual free cash flowtargets of more than $1 Billion.  All targets reflect GAAP tax rates of41% in 2008 and 35% to 36% over the next five years.

Visa shares closed up over 3% today at $78.45, and shares are mostly flat after the close.

Jon C. Ogg
July 30, 2008