Visa matches 4Q profit expectations, tops revenue forecasts

Payment processor Visa Inc. on Monday reported a 41 per cent rise in fiscal fourth-quarter earnings, helped by lower legal expenses and higher payment processing volumes on the company’s namesake network.

The earnings announcement came as Visa disclosed plans to buy Visa Europe in a deal that could be worth more than $23 billion and would consolidate all operations of the global payments processor. Visa Europe has operated independently of Visa Inc. since 2004.

Visa Inc. reported net income of $1.51 billion for the period ending Sept. 30, up from $1.07 billion in the same period a year ago. On a per-share basis, Visa earned 62 cents per A-class common share, versus 43 cents per A-class common share a year earlier. Visa had a one-time $450 million charge for legal expenses in 2014.

The results met Wall Street expectations. The average estimate of 18 analysts surveyed by Zacks Investment Research was also for earnings of 62 cents per share.

Global payment volume on Visa’s network, a key measure of the company’s business, rose 12 per cent to $1.265 trillion in the quarter, when adjusted for currency fluctuations. Like its main competitor MasterCard, Visa takes a small percentage of each debit or credit card transaction processed on its network as a fee. Credit and debit card volume in the U.S., Visa’s biggest single market, rose roughly 10 per cent from a year earlier.

The global payments processor posted revenue of $3.57 billion in the period, topping Street forecasts. Twelve analysts surveyed by Zacks expected $3.56 billion.

For the full year, Visa earned $6.33 billion compared with $5.44 billion in the same period a year earlier on $13.88 billion in operating revenue. Per share earnings were $2.58 per share versus $2.16 per share in 2014.

Its shares fell $1.28, or 1.7 per cent, to $76.30 in premarket trading Monday.

Visa shares have risen 18 per cent since the beginning of the year, while the Standard & Poor’s 500 index has increased 1 per cent. The stock has increased 29 per cent in the last 12 months.


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