) fiscal fourth-quarter 2013 (ended Sep 30, 2013) operating
earnings of $1.85 per Class A common share were in line with the
Zacks Consensus Estimate but outpaced the prior-year quarter
figure of $1.54 per share. Results in the reported quarter
included a restructuring reserve of about 4 cents per share.
Net income increased 15.2% to $1.19 billion from $1.04 billion
in the year-ago quarter. Including reversal of tax reserves of
$627 million or 93 cents per share, reported net income in the
year-ago quarter was $1.66 billion or $2.47 per share.
Alongside, total operating revenues for the reported quarter
were $2.97 billion, up 8.9% year over year but lagging the Zacks
Consensus Estimate of $3.02 billion. Growth was driven by higher
card spending and strong performance across all segments.
revenues increased 9.6% year over year to $1.39 billion and are
recognized based on payments volume in the prior quarter. All
other revenue categories are recognized based on the current
revenues grew 11.7% from the prior-year period to $1.19
revenues, which are driven by cross-border payments volume, rose
12.9% over the prior-year quarter to $899 million.
revenues, earned through Visa Europe's licensing fee, were $183
million, improving 6.4% from $172 million in the year-ago
, which is a contra-revenue item, came in at $680 million, and
accounted for 18.6% of gross revenues.
On a constant dollar basis, payment volume increased 13% year
over year to $1.1trillion. Total processed transactions carrying
the VisaNet brand increased 14% year over year to 15.5 billion.
Cross border volume, on a constant dollar basis, grew 11% over
the prior-year quarter.
Meanwhile, total operating expenses inched up 1% year over
year to $1.22 billion. Consequently, Visa's operating income grew
15% to $1.75 billion, while operating margin rose to 58.9% from
55.7% in the year-ago period.
For full-year fiscal 2013, Visa reported operating earnings of
$7.59 per Class A common share that beat the Zacks Consensus
Estimate by a penny. Additionally, the earnings substantially
exceeded prior fiscal year's earnings of $6.20 per share.
Consequently, operating net income escalated 18.5% year over year
to $4.98 billion.
Including extraordinary items, GAAP net income in fiscal 2012
stood at $2.14 billion or $3.16 per share. However, no
adjustments were recorded in fiscal 2013.
Alongside, total operating revenues were $11.78 billion, up
13% year over year, although it missed the Zacks Consensus
Estimate of $11.82 billion. Total processed transactions carrying
the VisaNet brand increased 10% year over year to 58.0 billion.
Results were within management's guidance.
Total core operating expenses rose 8.4% year over year to
$4.54 million. Operating margin climbed to 61% from 60% in the
prior fiscal year. However, GAAP operating margin reduced to 21%
in fiscal 2012 owing to GAAP operating expenses of $8.28 billion.
Effective tax rate was 31.4% in fiscal 2013 against 32.9% in
As of Sep 30, 2013, cash and cash equivalents and
available-for-sale investment securities amounted to $4.26
billion, up from $2.82 billion as of Sep 30, 2012. Nevertheless,
long-term debt remained nil at fiscal 2013-end, while total
assets declined to $35.96 billion from $40.01 billion at fiscal
2012-end. Total equity was $26.87 billion, down from $27.63
billion as of Sep 30, 2012.
Further, Visa's operating cash flow stood at $3.02 billion at
the end of fiscal 2013 against $5.01 billion recorded at the end
of fiscal 2012.
During the reported quarter, Visa repurchased about 7.0
million class A common shares for a total cost of $1.24 billion,
while shares worth $5.34 billion were bought back during fiscal
Concurrently, the board sanctioned a new share repurchase
program worth $5.0 billion. Including $251 million from the
current set authorized in Jul 2013, Visa now has $5.25 billion of
shares available for repurchases.
Visa detailed the financial outlook for fiscal 2014,
anticipating annual operating earnings per share to grow in
mid-to-high teens range. Annual net revenue growth is expected to
be within low double-digits, with an adverse foreign currency
impact of about 2%.
Meanwhile, the company affirmed annual operating margin of
low-60% range. Further, Visa expects client incentives within
16.5−17.5% of gross revenues. Additionally, annual free cash flow
is estimated to be around $5 billion in fiscal 2014.
On Oct 23, 2013, the board declared a 21.2% hike in its
quarterly dividend to 40 cents per share of class A common stock
from the prior 33 cents, marking the 5
consecutive annual dividend increment. Previously, in Oct 2012,
the company had raised its dividend by 50%.
The hiked dividend will be paid on Dec 3, 2013, to the
company's common shareholders of record as on Nov 15, 2013.
On Sep 4, 2013, Visa paid a quarterly dividend of 33 cents per
share to common shareholders of record as on Aug 16, 2013.
On Oct 16, arch rival
American Express Co.
) reported its third-quarter 2013 operating earnings per share of
$1.25. The result comfortably surpassed both the Zacks Consensus
Estimate of $1.22 and the year-ago quarter earnings of $1.09 a
share. Improved top line and cardmember spending supported
) is slated to release its third-quarter 2013 earnings before the
opening bell on Oct 31. Visa along with American Express,
MasterCard and peer,
), carries a Zacks Rank #2 (Buy).
AMER EXPRESS CO (AXP): Free Stock Analysis
FISERV INC (FISV): Free Stock Analysis Report
MASTERCARD INC (MA): Free Stock Analysis
VISA INC-A (V): Free Stock Analysis Report
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