Visa Inc. (V – Free Visa Stock Report), which operates the world's largest electronic payments network, has reported results for the third quarter of fiscal 2018. (Year concludes on September 30th.) During the three-month period ended June 30th, the company tallied revenues and earnings of $5.240 billion and $1.00 per share, respectively, representing improvements of 3% and 16% from the year-earlier figures. (We had looked for $5.095 billion and $1.09 a share on the top and bottom lines, respectively.) Shares of the Dow-30 member traded modestly lower following the financial release, as investors seemed to expect even more, though it's worth noting that they are still near an all-time high.
Visa continued to experience solid growth in transaction activity during the fiscal third quarter, both overseas and in its home market of North America. On point, total dollar volumes in Europe, Latin America, Asia/Pacific, and the segment comprised of Central Europe, the Middle East, and Africa increased 7.3%, 7.4%, 8.6%, and 6.6%, respectively, compared with the similar stretch of 2017. Meanwhile, total dollar volumes expanded a healthy 9.3% and 9.8%, respectively, in the United States and Canada. (All figures are presented on a constant-dollar basis.)
At the same time, cross-border transactions advanced 10% in the most recent quarter, and Visa processed a whopping 31.7 billion transactions, a jump of 12% year over year. The company's international operations generated roughly 60% of total dollar volumes in the most recent term, about-even with the prior-year period.
In all, we expect Visa to post record-setting operating results in both fiscal 2018 and 2019. For the current fiscal year, we look for revenues of $20.2 billion and earnings of $4.40 per share, which would mark increases of 9%-11% and 25%-27%, respectively, from 2017. Looking ahead, our fiscal 2019 top- and bottom-line targets of $22.4 billion and $5.20 a share, respectively, would represent improvements of 10%-12% and 17%-19% from our 2018 estimates. (Our forecasts for both years are unchanged.)
From an investment perspective, prospects for Visa are bright. The company continues to reward shareholders, including $2.2 billion in the form of dividends and stock buybacks during the latest three-month period, with another $5.8 billion of funds available for additional share repurchases. On the operating front, the outlook is also promising, since Visa remains the worldwide leader in the electronic payments space, registering more swipes than its three closest competitors (American Express (AXP – Free American Express Stock Report), MasterCard (MA), and Discover Financial Services (DFS)) combined. Moreover, the equity is top ranked for Safety (1, Highest), and the company garners an excellent mark for Financial Strength (A++). In a nutshell, shares of Visa offer something for investors of all stripes.
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
