Visa, Inc. (NYSE: V) has posted very pleasing earnings, one of the few bits of good news in the financial sector.  The credit card processing giant earned $0.78 EPS on an adjusted basis, beating estimates of $0.66 EPS.  Its revenues were $1.7 billion, ahead of estimates of $1.68 billion.  This report is strong enough that it is even boosting shares of MasterCard Inc. (NYSE: MA).

Processed transaction growth, the strength of debit transactions, and the global diversity of its business are why it is doing well, according to Visa.

The company also said that revenue growth is likely in the low single digits, but the company remains steadfast in its ability to meet its own 2009 EPS guidance. Full-year 2009 annual net revenue growth is in the high single-digits.

Visa has affirmed its financial outlook for the following metrics through 2010 (with the caveat that annual net revenue growth may be somewhat challenged in 2010 if the current economic environment in the U.S. and around the globe persists beyond 2009).  It sees annual net revenue growth at the lower end of the 11% to 15% range, adjusted operating margin in the mid-to-high 40% range, adjusted diluted class A common earnings per share growth of greater than 20%, free cash flow in excess of $1 billion, and cap-ex of $300 million to $350 million in 2009. That represents 3 to 4% of gross revenue in 2010.

All assumptions reflect an assumed 40% percent GAAP tax rate for 2009, which Visa hopes to reduce to around 35% to 36% over the next four years.

Visa stock closed up 1.5% at $49.13 today, but shares are up another 7% around $52.55 in after-hours reactions.  Its 52-week trading range is $41.78 to $89.84.

MasterCard Incorporated (NYSE: MA) closed up 0.3% today, but its shares are up almost 4% at $145.45 in after-hours trading.

Jon C. Ogg

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