Visa Inc., (V – Free Visa Stock Report) a leading electronic payments processor and Dow-30 member, has reported fiscal 2019 first-quarter results. (Fiscal years conclude on September 30th.) During the three-month stretch ended in December, the company logged $5.51 billion in revenues and $1.30 per share in earnings; the former marked a 13% increase from the prior-year period, while the latter was a 20% advance. (We had looked for $5.43 billion and $1.30 a share, respectively, on the top and bottom lines.) Visa shares, however, traded lower following the financial release.
The company's primary operating metrics remained strong during the fiscal first quarter, buoyed by transaction growth both domestically and overseas. On point, total dollar volumes in Europe, Latin America, Asia/Pacific, and the segment comprised of Central Europe, the Middle East, and Africa rose 7.4%, 9.2%, 7.1%, and 8.4%, respectively. Moreover, total dollar volumes in the United States and Canada expanded 9.6% and 8.3%, respectively. Cross-border volumes, another important indicator in the payments processing space, improved 7%, year over year, and Visa registered a whopping 33.9 billion in transactions in the latest quarter, representing growth of 11%. (All figures are presented on a constant-dollar basis.)
Looking ahead to the remainder of fiscal 2019, we anticipate another year of record-setting results. Indeed, we are maintaining our full-year revenue and share-net estimates at $23 billion and $5.30, respectively, which would mark increases of 11%-13% and 19%-21% from fiscal 2018's figures.
At the same time, Visa continues to reward shareholders, both in the form of stock buybacks and quarterly distributions. Specifically, during the December period, the company repurchased 16.9 million shares of class-A Visa common stock at an aggregate cost of $2.3 billion, and the board announced a new $8.5 billion authorization, bringing the total available funds for buybacks to $9.8 billion. Too, the dividend has been raised an average 25%, annually, over the past 10 years.
From an investment perspective, Visa shares would make a fine addition to most portfolios, in our view. The company remains the worldwide leader in the electronic payments processing niche, registering more swipes than its three closest competitors (American Express, MasterCard, and Discover Financial Services) combined. The balance sheet is in good shape (debt-to-total capital at a respectable 33%); revenues and share earnings continue to grow at a double-digit annual rate; and Visa now generates about 60% of transactions overseas, mitigating the risk of a downturn in any single market. Finally, the equity is top ranked for Safety (1), and the company garners high marks for Financial Strength (A++).
About The Company:Visa Inc. is the world’s largest retail electronic payments network providing processing services and payment product platforms. This includes credit, debit, prepaid, and commercial payments, which are offered under the Visa, Visa Electron, Interlink, and PLUS brands. Visa/PLUS is one of the largest global ATM networks, offering cash access in local currency in more than 200 countries. Visa’s global network, VisaNet, delivers value-added processing, including fraud and risk management.
- Sharif Abdou
