Electronic payments processor Visa (V – Free Visa Stock Report) has reported fiscal 2019 third-quarter results. (Year ends September 30th.) During the June interim, the Dow-30 member registered $5.84 billion in revenues, marking an 11.5% advance from the year-earlier figure. Moreover, earnings came in at $1.37 per share in the latest three-month period, representing a 37% gain from last year's comparable tally of $1.00. (Our top- and bottom-line forecasts were $5.65 billion and $1.30 per share, respectively.) Visa's share price was little changed following the financial release.
Transaction activity remained strong in the fiscal third quarter, both on the domestic and global fronts. On point, 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 7.5%, 3.0%, and 8.9%, respectively, year over year. At the same time, business was solid in North America; total volumes in the United States and Canada expanded 7.7% and 5.6%, respectively. (All figures are presented on a constant-dollar basis.)
At the three-quarter pole of fiscal 2019, Visa is poised for another record-setting year. Cross-border transactions climbed 7.0% in the June period, and the measure is on track to increase 5%-7% for the full year. In addition, the company processed a whopping 35.4 billion transactions in the fiscal third quarter, and that figure may well top 135.0 billion for all of fiscal 2019.
We have lifted our revenue and earnings targets for the current fiscal year by $500 million and $0.10 per share, respectively, to $23.0 billion and $5.40 per share; the former would be an advance of 11%-13% from fiscal 2018, while the latter would represent an increase of 21%-23%. Looking ahead, our top- and bottom-line forecasts for fiscal 2020, at $25.0 billion and $6.20 per share, respectively, would mark gains of 8%-10% and 14%-16% from our 2019 projections.
The investment thesis for Visa shares remains largely unchanged. The company is the global leader in the electronic payments space, logging more transactions than its three closest competitors (American Express (AXP – Free American Express Stock Report), MasterCard (MA), and Discover Financial Services (DFS)) combined. Too, the board of directors continues to return more capital to shareholders, and its financial position is rock solid. Long-term total return potential here is unremarkable, but the stock carries our Highest rank for Safety (1), and the company garners an excellent 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
