Visa Posts Strong Fiscal Third Quarter Earnings Beat

Banking, finance, and taxes

Published: July 23, 2015 4:58 pm

Last Updated: April 28, 2020 9:21 am

Visa Inc. (NYSE: V) released its fiscal third-quarter earnings report Thursday after the markets closed. The credit card issuer had $0.74 in earnings per share on $3.5 billion in revenue against Thomson Reuters consensus estimates of $0.59 in EPS on $3.36 billion in revenue. The second quarter from the previous year had $0.54 in EPS on $3.16 billion in revenue.

The company gave its financial outlook for the 2015 fiscal year. Visa expects EPS growth in the mid-teens range and annual net revenue growth: “Constant dollar revenue growth of low double digits, with an expectation of about 2.5 percentage points of negative foreign currency impact.” There are consensus estimates of $2.58 in EPS on $13.75 billion in revenue.

Payments volume growth, on a constant dollar basis for this quarter, was 11% over the previous year at $1.3 trillion.

Total processed transactions, which represent transactions processed by VisaNet, for this quarter, were 18.0 billion, an 8% increase over the prior year.

The board of directors declared a quarterly cash dividend of $0.12 per share for common stock, payable on September 1, 2015.

In the report the company noted that it believes there is compelling logic for both Visa and Visa Europe to consummate a business combination and therefore regularly engages in such discussions and is currently in such discussions with Visa Europe. The company is targeting to resolve these discussions by the end of October and will provide an update during the fourth quarter earnings call, if not sooner. There is no assurance, however, that any transaction will be ultimately agreed or implemented.

Charlie Scharf, CEO of Visa, said:

We continue to deliver solid financial results and operating metrics without the help of an improving economic environment. Strong underlying fundamentals continue to offset the drag from geopolitical tension and the strengthening dollar on our business.

At the end of the fiscal third quarter, Visa had cash and cash equivalents of $2.15 billion compared to $1.97 billion at the end of the 2014 fiscal year.

Shares of Visa closed Thursday down 0.3% at $71.75 on a 52-week trading range of $48.80 to $73.00. Following the release of the earnings report, shares were up 7.2% at $76.88 in the after-hours trading session. The stock has a consensus analyst price target of $76.27.

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