Sunday, April 27, 2014

VISA Q2 2014 Earnings Release

Last Thursday, Visa, Inc. slated to report 2Q2014 earnings. Reported fiscal second quarter 2014 Net Income of $1.6 Billion, an increase of 26% over the last year. Or $2.52 per diluted share, an increase of 31% over the last year. These result a tax benefit of $218 million of which $201 million relates to prior periods. Excluding the prior periods’ impact, earnings per share was $2.20, an increase of 15% over the last year. Net operating revenue in the fiscal first quarter of 2014 was $3.2 billion, an increase of 7% nominally or 9% on a constant dollar basis over the last year, driven by solid growth in service revenues, data processing revenues and international transaction revenues. The strengthening of the U.S. dollar impacted net operating revenues by 2% points of negative growth during the quarter. And these business drivers remained strong during the Q2 with payments volume continuing to grow at solid levels. As the U.S. dollar appreciated which impacted softer net revenue growth, the company expect this impact to be slightly more pronounced next quarter before rebounding in their Q4.
Payments volume growth, on a constant dollar basis, for the three months ended March 31, 2014, was 12% over the last year at $1.1 trillion. Cross-border volume growth was 8%. And total processed transactions, which represent transactions processed by VisaNet were 15.4 billion, and 11% increase over the last year. The effective tax rate was 22.5% for the Q2. This rate was positively impacted by a $218 million tax benefit recognized. Cash, cash equivalents, and available-for-sale investment securities were $6.5 billion.
The weighted-average number of diluted shares of class A common stock outstanding was 634 million for the Q2. The company repurchased 5.1 million shares of class A common stock, at an average price of $217.61 per share, using $1.1 billion of cash on hand. At March 31, 2014, the company had $3.0 billion of remaining funds, authorized by the board of directors, available for share repurchase under the current program. And the company declared a quarterly cash dividend of $0.4 per share of class A common stock.
The stock was down 5% last Friday, because the payment technology company said economic against Russia could hurt their profits this year. I think we can still hold the company. This is based on the company’s strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in Q2 earnings per share.

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