Visa Inc. (NYSE: V): Q3 Earnings Preview 2011

Visa Inc. (NYSE: V), the world’s largest electronic payments network, is scheduled to release its fiscal third-quarter earnings after the closing bell on Wednesday, July 27, 2011. Analysts, on average, expect the company to report earnings of $1.23 per share on revenue of $2.30 billion. In the year ago quarter, the company reported earnings of $0.97 per share on revenue of $2.03 billion.

Visa Inc. operates retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services, primarily authorization, clearing, and settlement, as well as related value-added services.

In the preceding first quarter, the San Francisco, California-based company's net income was $881 million, or $1.23 per class A common share, compare to $713 million, or 97 cents per class A common share, in the year-ago quarter. Net operating revenue climbed 15% to $2.2 billion. Analysts, on average, expected the company to report earnings of $1.20 per share on revenue of $2.23 billion.

Early in July, Visa reaffirmed its financial forecast through 2011 with annual earnings per class A share growth of greater than 20 percent, and annual net revenue growth of 11 percent to 15 percent. For the current year, Visa's forecast translates to revenue of between $8.95 billion and $9.11 billion and earnings of at least $4.84 per share. However, the company warned that its revenue and earnings growth will slow in 2012 after new regulations on the fees banks can charge for debit card transactions kick in. Next year. Visa said it expects its revenue growth to slow to the high-single-digit to low-double-digit range. The company expects earnings-per-share growth to slow to the mid-to-high teens. The slowdown will reflect the rules announced by the Federal Reserve last week that kick in on Oct. 1 and next April. The first will limit the fees that banks can charge retailers for processing debit card transactions. The second will give merchants the power to decide which network handles their transactions. Because Visa's fiscal year ends in September it was able to keep its forecast for the current year. Since the Fed moved the date the fee cap will kick in from July 21 to Oct. 1, it will have no impact on Visa's results for fiscal 2011. U.S. debit revenue accounts for about 20 percent of the company's overall revenue, CEO Joseph Saunders said during a conference call to discuss the forecast. We expect that fiscal 2012 will bear the weight of the regulations financially and in fiscal 2013 revenue growth will regain momentum," Saunders said during the conference call. The company also said it will elaborate further on the impact of the fee cap in its earnings conference call on July 27.

On the bright side, the company continues to benefit from strong secular demand growth, increased payment volumes, meaningful international exposure, high barriers to entry, excellent pricing power, impressive operating leverage, and consistent growth in processed transactions.

Full Disclosure: None.

Visa Inc. (NYSE: V): Q2 Earnings Preview 2011

Visa Inc. (NYSE: V), the world’s largest electronic payments network, is scheduled to release its fiscal first-quarter earnings after the closing bell on Thursday, May 5, 2011. Analysts, on average, expect the company to report earnings of $1.20 per share on revenue of $2.23 billion. In the year ago quarter, the company reported earnings of 96 cents per share on revenue of $1.96 billion.

Visa Inc. operates retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services, primarily authorization, clearing, and settlement, as well as related value-added services.

In the preceding first quarter, the San Francisco, California-based company's net income was $884 million or $1.23 per class A share for the first quarter, up from $763 million or $1.02 per class A share in the prior year quarter. Total operating revenues grew 14 percent to $2.24 billion from $1.96 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of $1.20 per share on revenue of $2.22 billion. 

At its last earnings call in February, the company said that it continues to expect earnings per class A share growth to be greater than 20 percent, while it anticipates net revenue growth to be in the 11 percent - 15 percent range.

The company continues to benefit from strong secular demand growth, increased payment volumes, meaningful international exposure, high barriers to entry, excellent pricing power, impressive operating leverage, and consistent growth in processed transactions.

Meanwhile, the company has continued to expand its e-commerce and mobile payments businesses. In February, the company agreed to acquire PlaySpan Inc., for about $190 million in cash, plus additional consideration for performance milestones. The acquisition is expected to be completed in Visa's fiscal second quarter 2011. The transaction is anticipated to be slightly dilutive to Visa's earnings per share in its fiscal year 2011 ending September 30, 2011. PlaySpan Inc., is a privately-held company whose payments platform handles transactions for digital goods in online games, digital media and social networks around the world.

However, uncertainty stemming from financial overhaul, which includes curbs on debit-card transaction fees, has taken some shine off Visa's shares.  Last month, the Federal Reserve on Thursday proposed capping fees banks can charge merchants for debit-card transactions at 12 cents. While that directly affects bank revenues from debit cards, the banks could try to get Visa and MasterCard to lower their fees to use their networks in order to offset the revenue loss. Visa has already estimated that about 16% or less of its revenues will be affected from the adverse impact of these regulations. According to Visa, the debit caps, set to take effect in July, won’t affect Visa’s results until the fiscal fourth quarter of 2011.

Full Disclosure: None.

Visa Inc. (NYSE: V): Q1 Earnings Preview 2011

Visa Inc. (NYSE: V), the world’s largest electronic payments network, is scheduled to release its fiscal first-quarter earnings after the closing bell on Wednesday, February 2, 2011. Analysts, on average, expect the company to report earnings of $1.20 per share on revenue of $2.22 billion. In the year ago quarter, the company reported earnings of $1.02 per share on revenue of $1.96 billion.

Visa Inc. operates retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services, primarily authorization, clearing, and settlement, as well as related value-added services.

In the preceding fourth quarter, the San Francisco, California-based company's net income was  $774 million, or $1.06 per class A share,  from $514 million, or 69 cents per class A share, in the year-ago quarter. On an adjusted basis, which excludes the revaluation of the company's Visa Europe put option, the company earned 95 cents per class A share in the latest quarter. Total operating revenues grew to $2.12 billion from $1.88 billion. Analysts, on average, expected the company to report earnings of 95 cents per share on revenue of $2.09 billion.

At its last earnings call in October, the company said that it continues to expect annual earnings per share growth of greater than 20% and net revenue growth in the range of 11% to 15%. Further, the company re-affirmed its volume and support incentives to be in the range of 16.0%-16.5% of gross revenue; advertising, marketing and promotional expenses to be less than $900 million and annual free cash flow to exceed $3 billion in fiscal 2011.

The company continues to benefit from strong secular demand growth, increased payment volumes, meaningful international exposure, high barriers to entry, excellent pricing power, impressive operating leverage, and consistent growth in processed transactions.

However, uncertainty stemming from financial overhaul, which includes curbs on debit-card transaction fees, has taken some shine off Visa's shares.  Last month, the Federal Reserve on Thursday proposed capping fees banks can charge merchants for debit-card transactions at 12 cents. While that directly affects bank revenues from debit cards, the banks could try to get Visa and MasterCard to lower their fees to use their networks in order to offset the revenue loss. Final recommendations on the proposal are set to be issued in April.  According to Visa, the debit caps, set to take effect in July, won’t affect Visa’s results until the fiscal fourth quarter of 2011.

The company is repurchasing shares and boosting dividends as lawmakers, litigators and regulators challenge the company’s fees and rules. Late in October, the board of Visa announced the authorization of a new $1.0 billion share buyback program, which is expected to be completed by September 30, 2011, but could be expanded or extended depending on the market conditions and the board’s approval. Although regulatory compliances as a result of the ongoing financial overhaul reform in the U.S. and litigation could weigh on the financials of the company in fiscal 2011 and ahead, Visa has been delivering growth by minimizing expenses, generating strong cash flow and maintaining a healthy capital position.

Full Disclosure: None.

Visa Inc. (NYSE: V): Q4 Earnings Preview 2010

Visa Inc. (NYSE: V), the world’s largest electronic payments network, is scheduled to release its fiscal fourth-quarter earnings after the closing bell on Wednesday, October 27, 2010. Analysts, on average, expect the company to report earnings of 95 cents per share on revenue of $2.09 billion. In the year ago quarter, the company reported earnings of 74 cents per share on revenue of $1.88 billion.

Visa Inc. operates retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services, primarily authorization, clearing, and settlement, as well as related value-added services.

In the preceding fiscal fourth quarter, the San Francisco, California-based company's net income was $716 million, or 97 cents per class A common share, compared to $729 million, or 96 cents per class A common share, in the year-earlier quarter. Net operating revenue grew 23% to $2 billion. Analysts, on average, expected the company to report earnings of 93 cents per share on revenue of $1.97 billion.

At its last earnings call in July, the company said that it continues to expect revenue growth at the high end of the 11% to 15% in its fiscal year 2010, and earnings per share growth of 20 percent or higher. It expects earnings per class A share growth to be greater than 20% through 2010 and 2011.

The company continues to benefit from strong secular demand growth, increased payment volumes, meaningful international exposure, high barriers to entry, excellent pricing power, impressive operating leverage, and consistent growth in processed transactions.

However, uncertainty stemming from financial overhaul, which includes curbs on debit-card transaction fees, has taken some shine off Visa's shares. However, the company does not anticipates any impact in fiscal year 2010. The company expects that the impact will be modest and contained to its fourth fiscal quarter 2011.

Looking ahead, the company expects most of its growth to come from outside the U.S. borders regardless of the domestic environment. Today,non-U.S. revenues make up approximately 40% of its business, and one of its stated 2015 goals is to generate half of its revenues from operations in the rest of the world.

The company's stock currently trades at a forward P/E (fye 30-Sep-11) of 17.05 and PEG ratio (5 yr expected) of 1.04. In terms of stock performance, Visa shares have lost nearly 9 percent since the beginning of the year.

Full Disclosure: None.

Visa Inc. (NYSE: V): Q1 Earnings Preview 2010

Visa Inc. (NYSE: V), the world’s largest electronic payments network, is scheduled to release its fiscal first quarter 2010 earnings after the closing bell on Wednesday, February 3, 2010. Analysts, on average, expect the company to report earnings of 91 cents a share on revenue of $1.92 billion. In the year ago quarter, the company reported earnings of 78 cents per share on revenue of $1.74 billion.

Visa Inc. operates retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services, primarily authorization, clearing, and settlement, as well as related value-added services.

Visa managed to escape relatively unscathed from the worst consequences of the global recession as credit-card networks are insulated from rising defaults because they process transactions and don’t make loans to cardholders. The continuing adoption of credit and debit cards worldwide has cushioned the effects of a U.S. slowdown. Total processed transactions, which represent transactions processed by VisaNet for the fiscal fourth quarter, increased 9% to 10.5 billion from the year-ago quarter.

In the preceding fiscal fourth quarter, the San Francisco, California-based company posted net income of $514 million or $0.69 per class A share for the fourth quarter, compared to a loss of $356 million or $0.45 per share in the prior year quarter. Excluding items, adjusted net income grew to $552 million or $0.74 per class A share from $448 million or $0.58 per class A share in the year-ago quarter. Fourth quarter net operating revenue increased 10% to $1.9 billion from $1.7 billion in the same quarter last year, driven primarily by strong contributions from data processing revenues as processed transactions grew 9%. Analysts, on average, expected the company to report earnings of $0.72 per share on revenue of $1.78 billion.

Total cards carrying the Visa brands rose 5% worldwide to over 1.7 billion from the fourth quarter of 2008.

For fiscal 2010, Visa expects earnings per class A share growth to be greater than 20%, and net revenue growth at the lower end of the 11% to 15% range. The company expects full year 2010 operating margin to be in the mid-50s, up slightly from the low-50s Visa achieved in its last fiscal year. Its projection for free cash flow for the year is north of $2.0 billion.

For fiscal 2011, the company anticipates earnings per class A share growth to be greater than 20%.

At September 30, 2009, the company had cash, cash equivalents, restricted cash, and investment securities of $6.6 billion.

Visa said that its board has authorized a $1 billion share repurchase plan. The authorization will be in place through September 30, 2010, and is subject to extension or expansion at the determination of Visa's board.

Among other developments, Standard & Poor's added Visa Inc. to the S&P 500 index in December.

The upcoming quarterly report is likely to reflect strong holiday season and improved transaction levels, volume and international travel.

The company's stock currently trades at a forward P/E (fye 30-Sep-11) of 18.77 and PEG ratio (5 yr expected) of 1.14. In terms of stock performance, Visa shares have gained 79 percent over the past year.

Full Disclosure: None.