Electronic payments processor Visa Inc. (V – Free Visa Stock Report) has reported fiscal 2017 third-quarter results. (Years end September 30th.) Revenues came in at $4.57 billion in the latest period, exceeding our forecast of $4.24 billion and the $3.63 billion registered in the prior-year period. At the same time, the company earned $0.86 a share in the June term, well above our $0.76 call and the year-earlier figure of $0.69. Both the top- and bottom-line tallies marked quarterly records for the Dow-30 component, and Visa shares traded modestly higher on the news.
Payments volume increased 38% in the third quarter, year over year, to a whopping $1.86 trillion. Meanwhile, growth in cross-border transactions remained solid, rising 11% (inclusive of Visa Europe in the prior-year results). In sum, Visa processed 36.7 billion transactions in the most recent three-month period, representing a 23% jump from the comparable 2016 span. (All figures in our report are presented on a constant-dollar basis.)
Growth within Visa's vast international operations has slowed in recent periods, and that trend continued in the June quarter. On point, total volumes in Latin America, Asia/Pacific, and the segment comprised of Central Europe, the Middle East, and Africa advanced 8%, 2%, and 7%, respectively, versus the year-ago figures. (Those respective units reported growth of 10%, 7%, and 11% in the comparable fiscal 2016 term.) On a positive note, its overseas business now represents 60% of all swipes, versus 51% a year earlier.
Coming down the home stretch of fiscal 2017, this is looking like another record-setting year for Visa. We expect revenues and earnings to each improve 15%-17%, to $17.5 billion and $3.30 a share, respectively. For fiscal 2018, our top- and bottom-line estimates stand at $19.5 billion and $3.85 a share, respectively, which would mark 10%-12% and 16%-18% advances from our 2017 projections.
Our long-term outlook for Visa Inc. remains quite positive. The company is a leader in the global electronic payments marketplace, registering more transactions than its three closest competitors (American Express (AXP – Free American Express Stock Report), MasterCard (MA), and Discover Financial Services (DFS) combined. The stock carries our Highest rank for Safety (1), and the company earns a stellar mark for Financial Strength (A++), making Visa shares a good addition to most investment portfolios.
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.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
