Visa's Earnings Beat Matched With Big Share Buyback Plan

Visa Inc. (NYSE: V) managed to exceed earnings estimates and the news is likely going to be viewed positively for rival Mastercard Inc. (NYSE: MA).  Visa’s earnings were also bested by the announcement of a $1 billion share buyback plan from the credit card processor.

Adjusted quarterly earnings came in at $1.1 billion, or $1.56 per share outside of a litigation provision and related tax benefit. Thomson Reuters was calling for $1.45 EPS.  Investors may be spooked by the $1.8 billion GAAP loss, but this reflects a litigation provision of $4.1 billion covered under the company’s retrospective responsibility plan.  On top of the $1 billion share buyback, Visa deposited $150 million into the litigation escrow fund.  The $1 billion compares to a market cap of about $82 billion.

The credit card processing giant reported that payments volume growth was a positive 6% over the prior year at $979 billion on a constant dollar basis.  Cross-border volume growth on a constant dollar basis was up 14% for the quarter.

Visa shares closed down 0.3% today but the shares are up by 1.2% at $123.66 in the after-hours trading session.  Its 52-week high is up at $131.00.

JON C. OGG