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Will Growing Payments & Transactions Boost Visa (V) Q3 Earnings?
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Visa Inc. (V - Free Report) is scheduled to release its fiscal third quarter of 2023 results on Jul 25, after the closing bell. The focal point of the payments technology company’s earnings release will be its payments volume and transactions growth. Higher year-over-year transactions during the quarter under discussion are likely to enhance results.
As the company's activities are heavily interrelated, it has one reportable segment, Payment Services. Under this segment, it has four primary revenue lines: Service, Data Processing, International Transaction and Other revenues. It offers a wide range of Visa-branded payment products, which diversifies its earnings source.
Q2 Highlights
In the last reported quarter, the company’s payments volume (the primary driver of Service revenues) jumped 6.4% year over year on a nominal basis to $2,955 billion. While credit programs grew 8.5% year over year to about $1,486 billion, debit programs witnessed a 4.3% increase to around $1,468 billion. Operations in the United States and Latin America were among the major growth drivers.
Also, Visa’s total processed transactions (the key catalyst for Data Processing revenues) in the previous quarter witnessed an 11.7% year-over-year increase to 50.1 billion.
Forecast for Q3 Performance
The continuous migration to the digital form of payments and Visa’s expansion of service offerings are expected to have played a significant role in boosting its fiscal third-quarter results. The ongoing economic volatility and high interest rate environment are expected to have affected payments and transaction volumes in the quarter under review. However, the company’s ability to strike new deals, renew agreements and its accretive acquisitions are likely to have helped it to expand its network.
The network expansion enables V to garner more and more transaction volumes despite macroeconomic headwinds. This is likely to get reflected in the upcoming quarterly results. Our estimate for fiscal third quarter processed transactions indicates more than 4% year-over-year growth. As such, we expect its Data Processing revenues for the June quarter to jump 10% year over year.
Our estimate for total transactions in the quarter indicates more than 5% year-over-year growth, supported by increased payments transactions, partially offset by declining cash transactions.
Our estimate for payments volumes suggests around 6% year-over-year growth on a nominal basis to $3,118 billion for the fiscal third quarter. Considering operations by regions, Latin America, Canada and the United States are expected to have been major growth drivers in this period. However, the positives are likely to have been impacted by declines in CEMEA and overall Europe operations.
While credit programs are expected to have offered more than 8% year-over-year growth to payments volume, debit programs are likely to have contributed an almost 4% rise in the quarter under review. Our estimate for Service revenues for the quarter is pegged at $3,696.4 million, suggesting an increase from $3,189 million a year ago.
Overall Projections for Q3
The Zacks Consensus Estimate for total revenues is pegged at $8.1 billion, suggesting a 10.7% year-over-year jump. The consensus estimate for adjusted earnings per share stands at $2.10, which suggests a 6.1% increase from the year-ago tally of $1.98.
Visa beat earnings estimates in all the trailing four quarters, delivering an average of 8%.
Our proven model predicts a likely earnings beat for Visa this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is precisely the case here.
Visa has an Earnings ESP of +0.53% and currently carries a Zacks Rank #3.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other companies from the broader Business Services space that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around:
The Zacks Consensus Estimate for Booz Allen’s bottom line for the to-be-reported quarter is pegged at $1.25 per share, which suggests a 10.6% year-over-year jump. BAH beat earnings estimates in all the past four quarters, with an average of 10.2%.
Avis Budget Group, Inc. (CAR - Free Report) has an Earnings ESP of +1.46% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Avis Budget’s bottom line for the to-be-reported quarter is pegged at $9.78 per share, which witnessed one upward estimate revision over the past month against no movement in the opposite direction. Furthermore, the consensus mark for CAR’s revenues is pegged at $3.2 billion.
S&P Global Inc. (SPGI - Free Report) has an Earnings ESP of +1.58% and a Zacks Rank of 2.
The Zacks Consensus Estimate for S&P Global’s bottom line for the to-be-reported quarter is pegged at $3.11 per share, indicating 10.7% year-over-year growth. SPGI beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 3.1%.
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Will Growing Payments & Transactions Boost Visa (V) Q3 Earnings?
Visa Inc. (V - Free Report) is scheduled to release its fiscal third quarter of 2023 results on Jul 25, after the closing bell. The focal point of the payments technology company’s earnings release will be its payments volume and transactions growth. Higher year-over-year transactions during the quarter under discussion are likely to enhance results.
Also read: (Can Visa's Q3 Earnings Beat on Higher US Payment Levels?) to find out how the company’s overall fiscal third quarter performance is expected to have been.
As the company's activities are heavily interrelated, it has one reportable segment, Payment Services. Under this segment, it has four primary revenue lines: Service, Data Processing, International Transaction and Other revenues. It offers a wide range of Visa-branded payment products, which diversifies its earnings source.
Q2 Highlights
In the last reported quarter, the company’s payments volume (the primary driver of Service revenues) jumped 6.4% year over year on a nominal basis to $2,955 billion. While credit programs grew 8.5% year over year to about $1,486 billion, debit programs witnessed a 4.3% increase to around $1,468 billion. Operations in the United States and Latin America were among the major growth drivers.
Also, Visa’s total processed transactions (the key catalyst for Data Processing revenues) in the previous quarter witnessed an 11.7% year-over-year increase to 50.1 billion.
Forecast for Q3 Performance
The continuous migration to the digital form of payments and Visa’s expansion of service offerings are expected to have played a significant role in boosting its fiscal third-quarter results. The ongoing economic volatility and high interest rate environment are expected to have affected payments and transaction volumes in the quarter under review. However, the company’s ability to strike new deals, renew agreements and its accretive acquisitions are likely to have helped it to expand its network.
The network expansion enables V to garner more and more transaction volumes despite macroeconomic headwinds. This is likely to get reflected in the upcoming quarterly results. Our estimate for fiscal third quarter processed transactions indicates more than 4% year-over-year growth. As such, we expect its Data Processing revenues for the June quarter to jump 10% year over year.
Our estimate for total transactions in the quarter indicates more than 5% year-over-year growth, supported by increased payments transactions, partially offset by declining cash transactions.
Our estimate for payments volumes suggests around 6% year-over-year growth on a nominal basis to $3,118 billion for the fiscal third quarter. Considering operations by regions, Latin America, Canada and the United States are expected to have been major growth drivers in this period. However, the positives are likely to have been impacted by declines in CEMEA and overall Europe operations.
While credit programs are expected to have offered more than 8% year-over-year growth to payments volume, debit programs are likely to have contributed an almost 4% rise in the quarter under review. Our estimate for Service revenues for the quarter is pegged at $3,696.4 million, suggesting an increase from $3,189 million a year ago.
Overall Projections for Q3
The Zacks Consensus Estimate for total revenues is pegged at $8.1 billion, suggesting a 10.7% year-over-year jump. The consensus estimate for adjusted earnings per share stands at $2.10, which suggests a 6.1% increase from the year-ago tally of $1.98.
Visa beat earnings estimates in all the trailing four quarters, delivering an average of 8%.
Our proven model predicts a likely earnings beat for Visa this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is precisely the case here.
Visa has an Earnings ESP of +0.53% and currently carries a Zacks Rank #3.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Visa Inc. Price and EPS Surprise
Visa Inc. price-eps-surprise | Visa Inc. Quote
Other Stocks That Warrant a Look
Here are some other companies from the broader Business Services space that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around:
Booz Allen Hamilton Holding Corporation (BAH - Free Report) has an Earnings ESP of +3.20% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Booz Allen’s bottom line for the to-be-reported quarter is pegged at $1.25 per share, which suggests a 10.6% year-over-year jump. BAH beat earnings estimates in all the past four quarters, with an average of 10.2%.
Avis Budget Group, Inc. (CAR - Free Report) has an Earnings ESP of +1.46% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Avis Budget’s bottom line for the to-be-reported quarter is pegged at $9.78 per share, which witnessed one upward estimate revision over the past month against no movement in the opposite direction. Furthermore, the consensus mark for CAR’s revenues is pegged at $3.2 billion.
S&P Global Inc. (SPGI - Free Report) has an Earnings ESP of +1.58% and a Zacks Rank of 2.
The Zacks Consensus Estimate for S&P Global’s bottom line for the to-be-reported quarter is pegged at $3.11 per share, indicating 10.7% year-over-year growth. SPGI beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 3.1%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.