Electronic payments processor Visa (V – Free Visa Stock Report) has reported financial results for the final quarter of fiscal 2017. (Year ended September 30th.) Revenues were $4.86 billion in the latest period, versus our forecast of $4.50 billion and last year's comparable total of $4.26 billion. On the bottom line, the company earned $0.90 per share in the September term, compared with our $0.87 estimate and the $0.78 logged in the year-earlier period. Once again, revenues and share net represented quarterly records for the Dow-30 member, and Visa shares moved modestly higher on the news.
Payments volume increased 10%, year over year, in the fourth quarter, and cross-border transactions expanded by the same amount. All told, Visa processed 29.2 billion transactions in the most recent three-month term, marking a 13% advance from 2016's similar span. (All figures in our report are presented on a constant-dollar basis, and are inclusive of Visa Europe in the prior-year results.)
Visa's international operations have experienced slower growth in recent periods, but transaction activity picked up in the fiscal fourth quarter. To wit, total volumes in Latin America, Asia/Pacific, and the segment comprised of Central Europe, the Middle East, and Africa increased 12%, 9%, and 20%, respectively, versus the comparable year-ago figures. (Visa's overseas business accounts for 61% of the total dollar volumes.)
Looking ahead to fiscal 2018, we have added $200 million and $0.05 to our respective revenue and share-earnings targets, which now stand at $20.2 billion and $4.00. (The former would represent growth of 10% from 2017's tally, while the latter would mark a 15% advance.)
Visa's prospects over the long haul remain bright, and the stock would make a worthwhile addition to most investment portfolios, in our view. The company is a leader in electronic payments processing worldwide, ringing up more transactions than its three closest competitors (American Express (AXP – Free American Express Stock Report), MasterCard (MA), and Discover Financial Services (DFS)) combined. The board of directors continues to return capital to shareholders, including $8.5 billion during fiscal 2017 in the form of share repurchases and dividends. Total return potential over the next 3 to 5 years is muted at the recent price, but the stock carries our Highest rank for Safety (1), and the company earns a stellar mark 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
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
