Visa Q4 Profit Rises, Tops Street

(RTTNews) - Visa Inc. (V) on Monday reported an increase in profit for the fourth quarter, as revenues jumped driven largely by increase in customer spending and inclusion of Europe business. Earnings and revenues trumped Wall Street expectations.

Foster City, California-based Visa's fourth-quarter profit rose to $1.93 billion or $0.79 per class A share from $1.51 billion or $0.62 per share a year ago.

Adjusted earnings were $1.92 billion or $0.78 per share. On average, 31 analysts polled by Thomson Reuters expected earnings of $0.73 per share. Analysts' estimates typically exclude one-time items.

Visa, the world's largest credit and debit card company, said revenues for the fourth quarter jumped 19 percent to $4.26 billion from $3.57 billion last year. Analysts had a consensus revenue estimate of $4.23 billion.

Revenue growth was driven by the inclusion of Europe and continued growth in payments volume and processed transactions, the company said.

"We continue to deliver healthy earnings growth in the face of continued, but abating headwinds. We have begun to see the benefits from our acquisition of Visa Europe and strong cost discipline helped our results. At the same time, we are unwavering in our commitment to invest in client partnership opportunities and the further build out of our digital payments capabilities," said CEO Charlie Scharf.

Visa's fourth-quarter service revenues - based on payments volume in the prior quarter - rose 8 percent to $1.8 billion. Data processing revenues for the quarter increased 25 percent to $1.8 billion, while international transaction revenues climbed 36 percent to $1.5 billion.

Payments volume growth, excluding Visa Europe and on a constant dollar basis, for the three months ended June 30, 2016, on which fiscal fourth quarter service revenue is recognized, was 10 percent over the prior year at $1.3 trillion. Visa processed 25.9 billion transactions in the quarter, up 41 percent from last year.

In November last year, Visa announced its deal to buy its former subsidiary Visa Europe Ltd., in a deal worth $22 billion.

Looking forward, Scharf said, "As we enter fiscal 2017, we are positioned well as revenue headwinds will continue to ease, we will continue to see the benefits from Visa Europe in our results, and our strong client franchise continues to grow."

For the full year 2017, Visa expects adjusted earnings growth in the mid-teens range and revenue growth of 16 to 18% on a constant dollar basis.

V closed Monday's trading at $83.17, up $0.82 or 1.00%, on the NYSE. The stock, however, slipped $1.05 or 1.26% in the after-hours trade.