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Visa (V) Tops Q4 Earnings & Revenues, Provides FY17 View
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Visa Inc. (V - Free Report) posted fourth-quarter fiscal 2016 (ended Sep 30) adjusted net income of $1.9 billion or 78 cents per share. The bottom line not only beat the Zacks Consensus Estimate of 73 cents per share but also increased 27% year over year.
Including severance cost of 3 cents and re-measurement of deferred tax liability of 4 cents, the company reported net income of 79 cents per share in the fiscal fourth quarter. This reflected an increase of 28% over the prior year.
Net operating revenue of $4.3 billion surpassed the Zacks Consensus Estimate of $4.2 billion and increased 19% year over year. This upside was primarily driven by the acquisition of Visa Europe and continued growth in payments volume and processed transactions. On a constant dollar basis, payments volume growth including Visa Europe was recorded at $1.9 trillion, up 47% from the year-ago quarter when contribution from Visa Europe was absent.
Visa's International transaction revenues, which are driven by cross-border payments volume, grew 36% over the prior year to $1.5 billion. On a constant dollar basis, cross-border payments volume was 149% for the three months ended Sep 30, 2016.
Total processed transactions, including Visa Europe, was 25.9 billion, up 41% year over year.
Service revenues increased 8% year over year to $1.8 billion on growth in payments volume. Data processing revenues surged 25% year over year to $1.8 billion. Client incentives, which represented 18.9% of gross revenue, were $993 million.
Other revenues inched up 1% year over year to $218 million.
Adjusted operating expenses for the fiscal fourth quarter were $1.5 billion, up 18% year over year
Fiscal 2016 Highlights
Adjusted net income was $6.9 billion or $2.84 per share, up 7% or 8%, respectively, on a year-over-year basis.
Net operating revenue of $15.1 billion grew 9% year over year driven by the same factors.
Financial Update
Cash, cash equivalents, and available-for-sale investment securities were $12.8 billion as of Sep 30, 2016.
Total assets increased to $64 billion from $39.4 billion as of Sep 30, 2015.
Total liabilities were $31 billion compared with $9.5 billion as of Sep 30, 2015.
Total equity was $33 billion compared with $29.8 billion as of Sep 30, 2015.
Share Repurchase and Dividend Update
During the fiscal fourth quarter, Visa spent $1.7 billion to repurchase 20.5 million class A common stock at an average price of $80.76 per share. Visa spent a total of $7.1 billion in fiscal 2016 to repurchase 92.1 million shares. As of Sep 30, 2016, Visa was left with $5.7 billion of funds remaining for share repurchase.
On Oct 17, the board of directors of Visa approved an 18% hike in its quarterly dividend. The company will now reward shareholders with a dividend of 16.5 cents per share or a dividend of $66 cents per share on an annualized basis. The increased dividend will be paid on Dec 6, to the shareholders on record as of Nov 28, 2016.
Fiscal 2017 Guidance
This outlook includes integration expenses associated with the Visa Europe buyout of approximately $80 million.
For the fiscal year, annual net revenue is expected to grow in a range of 16–18% with an adverse foreign currency impact of 1–1.5%. The annual operating margin is anticipated to be at mid-60%. The effective tax rate is likely to be around 30%. Client incentives are expected to account for 20.5% to 21.5% of gross revenue.
Earnings per share is expected to grow at mid-teens digit on normal dollar basis.
Among the other players from the finance sector that have reported their earnings so far, the bottom line at Alliance Data Systems Corporation , Progressive Corp (PGR - Free Report) and American Express Company (AXP - Free Report) comfortably beat their respective Zacks Consensus Estimate.
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Visa (V) Tops Q4 Earnings & Revenues, Provides FY17 View
Visa Inc. (V - Free Report) posted fourth-quarter fiscal 2016 (ended Sep 30) adjusted net income of $1.9 billion or 78 cents per share. The bottom line not only beat the Zacks Consensus Estimate of 73 cents per share but also increased 27% year over year.
Including severance cost of 3 cents and re-measurement of deferred tax liability of 4 cents, the company reported net income of 79 cents per share in the fiscal fourth quarter. This reflected an increase of 28% over the prior year.
Net operating revenue of $4.3 billion surpassed the Zacks Consensus Estimate of $4.2 billion and increased 19% year over year. This upside was primarily driven by the acquisition of Visa Europe and continued growth in payments volume and processed transactions. On a constant dollar basis, payments volume growth including Visa Europe was recorded at $1.9 trillion, up 47% from the year-ago quarter when contribution from Visa Europe was absent.
Visa's International transaction revenues, which are driven by cross-border payments volume, grew 36% over the prior year to $1.5 billion. On a constant dollar basis, cross-border payments volume was 149% for the three months ended Sep 30, 2016.
Total processed transactions, including Visa Europe, was 25.9 billion, up 41% year over year.
Service revenues increased 8% year over year to $1.8 billion on growth in payments volume. Data processing revenues surged 25% year over year to $1.8 billion. Client incentives, which represented 18.9% of gross revenue, were $993 million.
Other revenues inched up 1% year over year to $218 million.
Adjusted operating expenses for the fiscal fourth quarter were $1.5 billion, up 18% year over year
Fiscal 2016 Highlights
Adjusted net income was $6.9 billion or $2.84 per share, up 7% or 8%, respectively, on a year-over-year basis.
Net operating revenue of $15.1 billion grew 9% year over year driven by the same factors.
Financial Update
Cash, cash equivalents, and available-for-sale investment securities were $12.8 billion as of Sep 30, 2016.
Total assets increased to $64 billion from $39.4 billion as of Sep 30, 2015.
Total liabilities were $31 billion compared with $9.5 billion as of Sep 30, 2015.
Total equity was $33 billion compared with $29.8 billion as of Sep 30, 2015.
Share Repurchase and Dividend Update
During the fiscal fourth quarter, Visa spent $1.7 billion to repurchase 20.5 million class A common stock at an average price of $80.76 per share. Visa spent a total of $7.1 billion in fiscal 2016 to repurchase 92.1 million shares. As of Sep 30, 2016, Visa was left with $5.7 billion of funds remaining for share repurchase.
On Oct 17, the board of directors of Visa approved an 18% hike in its quarterly dividend. The company will now reward shareholders with a dividend of 16.5 cents per share or a dividend of $66 cents per share on an annualized basis. The increased dividend will be paid on Dec 6, to the shareholders on record as of Nov 28, 2016.
Fiscal 2017 Guidance
This outlook includes integration expenses associated with the Visa Europe buyout of approximately $80 million.
For the fiscal year, annual net revenue is expected to grow in a range of 16–18% with an adverse foreign currency impact of 1–1.5%. The annual operating margin is anticipated to be at mid-60%. The effective tax rate is likely to be around 30%. Client incentives are expected to account for 20.5% to 21.5% of gross revenue.
Earnings per share is expected to grow at mid-teens digit on normal dollar basis.
VISA INC-A Price, Consensus and EPS Surprise
VISA INC-A Price, Consensus and EPS Surprise | VISA INC-A Quote
Zacks Rank and Performance of Other Stocks
Visa presently carries Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among the other players from the finance sector that have reported their earnings so far, the bottom line at Alliance Data Systems Corporation , Progressive Corp (PGR - Free Report) and American Express Company (AXP - Free Report) comfortably beat their respective Zacks Consensus Estimate.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>