Electronic payments processor Visa Inc. (V- Free Visa Stock Report) has reported fiscal 2019 second-quarter results. (Year ends on September 30th.) In the latest three-month stretch, the Dow-30 member logged $5.49 billion in revenues, representing an 8.3% gain from the prior-year level. At the same time, the company earned $1.31 a share in the March period, which marked an 18.0% advance from last year's figure of $1.11. (Our respective top- and bottom-line calls were $5.64 billion and $1.30 a share.) Visa stock, which had been trading near an all-time high in recent weeks, traded modestly lower following the earnings release.
Visa's transaction activity remained solid in the fiscal second quarter, both at home and abroad. During the most recent period, total volumes in Latin America, Asia/Pacific, and the segment comprised of Central Europe, the Middle East, and Africa increased 5.9%, 3.7%, and 7.8%, respectively, from the comparable span of fiscal 2018. Not to be outdone, business was again robust in the company's home market of North America; total volumes in the United States and Canada expanded 6.9% and 6.6%, respectively, during the March term. (All figures are presented on a constant-dollar basis.)
At the midpoint of fiscal 2019, the leader in global electronic payments is on track for another record-setting campaign. Growth in cross-border transactions has slowed over the last year or so, but still climbed a respectable 4% in the latest period, and ought to advance 5%-7% for the full year. Too, Visa processed a staggering 32.5 billion transactions in the fiscal second quarter, and that number should eclipse 130.0 billion for all of 2019. All told, our revenue and earnings targets for the current year stand at $23.0 billion and $5.30 per share, respectively, which would mark year-over year gains of 11%-13% and 19%-21%. Looking ahead, we're introducing fiscal 2020 top- and bottom-line estimates of $25.5 billion and $6.20 per share, respectively; the former would be an increase of 10%-12% from our 2019 forecast, while the latter represents growth of 16%-18%.
In summary, Visa stock should appeal to a broad range of investors, in our view. The board of directors continues to return capital to shareholders, both in the form of annual dividend increases (up more than 30%, on average, over the last five years) and stock buybacks (with $8.3 billion remaining for repurchases). In addition, its operations are rock solid; Visa registers more transactions than its three closest competitors (American Express, MasterCard, and Discover Financial Services) combined. Finally, although long-term total return potential here is unremarkable, the issue carries our Highest rank for Safety (1), and the company garners 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
