Why Visa Won Big on Q1 Earnings

By Chris Lange Updated Jan 12, 3:13PM EST · Published Feb 2, 4:36PM EST

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Why Visa Won Big on Q1 Earnings — © Thinkstock

[cnxvideo id=”655407″ placement=”ros”]Visa Inc. (NYSE; V) released fiscal first-quarter earnings report after markets closed on Thursday. The company reported $0.86 in earnings per share (EPS) on $4.5 billion in revenue. The same period from last year had $0.69 in EPS and $3.56 billion in revenue. Consensus estimates from Thomson Reuters were calling for $0.78 in EPS and $4.29 billion in revenue.

For the fiscal first quarter, payments volume growth, on a constant dollar basis, was 39% over the prior year at $1.8 trillion. At the same time, cross-border volume growth, on a constant dollar basis, was 140%.

Total processed transactions were 27.3 billion, a 44% increase year over year.

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The credit card giant detailed its business segments as:

Service revenues were $1.9 billion, an increase of 17% year over year.
Data processing revenues rose 28% over the prior year to $1.9 billion.
International transaction revenues grew 44% over the prior year to $1.5 billion.
Other revenues were $203 million, an increase of 2% over the prior year.

In terms of the outlook for 2017, the company expects to see annual net revenue growth in the range of 16% to 18% on a nominal dollar basis. Visa also expects to see adjusted EPS grow in the mid-teens on a nominal dollar basis. Consensus estimates are calling for $3.85 in EPS and $19.59 billion in revenue for the coming year.

On the books, cash, cash equivalents, and available-for-sale investment securities totaled $13.2 billion at the end of the quarter.

Alfred F. Kelly, Jr., CEO of Visa, commented:

Visa’s fiscal 2017 is off to a terrific start with a strong first quarter of revenue and earnings growth driven by accelerating growth in payments volume, cross-border commerce and processed transactions in virtually all regions around the world. As we look ahead, we continue to see good momentum in the business driven by domestic and cross-border volumes, increasing consumer participation in electronic payments in developing markets, and the further acceleration of e-commerce in developed markets. We remain focused on the integration of Europe which is proceeding well.

Shares of Visa closed Thursday at $82.30, with a consensus analyst price target of $95.45 and a 52-week trading range of $66.12 to $84.27. Following the release of the earnings report, the stock was up 2.4% at $84.25 in the after-hours trading session.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.