Visa's Earnings Top Expectations -- Update
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Visa (NYSE:V)
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Today : Thursday 23 July 2015
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By Josh Beckerman
Visa Inc.'s earnings for its fiscal third quarter topped Wall Street expectations as the company posted growth in payment volume.
In after-hours trading, shares rallied 7.8% to $77.34.
For the period ended June 30, Visa reported a profit of $1.7 billion, or 69 cents per Class A share, up from $1.36 billion, or 54 cents per Class A share, a year earlier.
Excluding an adjustment related to the fair value of a Visa Europe put option, the company earned 74 cents a Class A share.
Revenue rose to $3.52 billion from $3.16 billion.
Analysts polled by Thomson Reuters projected earnings of 59 cents a share on revenue of $3.36 billion.
"We continue to deliver solid financial results and operating metrics without the help of an improving economic environment. Strong underlying fundamentals continue to offset the drag from geopolitical tension and the strengthening dollar on our business," Visa said in a statement.
Bloomberg News reported in May that Visa was in early talks to buy its former unit Visa Europe Ltd. for as much as $20 billion. Visa said Thursday that there is "compelling logic" for a combination and said it is currently in talks with Visa Europe.
Visa hopes to "resolve these discussions by the end of October" and may provide an update in its fourth-quarter earnings call, if not sooner.
Payments volume growth, on a constant dollar basis, rose 11% to $1.3 trillion.
Spending on credit and debit cards has been strong as consumers migrate from cash and checks to electronic payments. Visa and competitor MasterCard Inc. don't issue cards or set interest rates, but they charge fees to financial institutions for transactions that travel over their networks.
Visa's digital efforts have included the launch of Visa Digital Solutions, an initiative geared toward secure payments using mobile devices. Visa and others have supported Apple Inc.'s Apple Pay service.
Visa results follow a Wednesday quarterly report from Discover Financial Services, which said second-quarter profit fell 7% as higher expenses hampered results and revenue was essentially flat.
