Q2 2011 Earnings Call
May 05, 2011 5:00 pm ET
Joseph Saunders - Executive Chairman and Chief Executive Officer
Byron Pollitt - Chief Financial Officer and Principal Accounting Officer
Jack Carsky - Global Head of Investor Relations
James Friedman - Susquehanna Financial Group, LLLP
Adam Frisch - Morgan Stanley
Robert Napoli - Piper Jaffray Companies
Craig Maurer - Credit Agricole Securities (USA) Inc.
Julio Quinteros - Goldman Sachs Group Inc.
Christopher Mammone - Deutsche Bank AG
David Koning - Robert W. Baird & Co. Incorporated
Tien-Tsin Huang - JP Morgan Chase & Co
Moshe Katri - Cowen and Company, LLC
Rod Bourgeois - Sanford C. Bernstein & Co., Inc.
Moshe Orenbuch - Crédit Suisse AG
Donald Fandetti - Citigroup Inc
Daniel Perlin - RBC Capital Markets, LLC
Bruce Harting - Barclays Capital
Andrew Jeffrey - SunTrust Robinson Humphrey, Inc.
David Hochstim - Buckingham Research Group, Inc.
James Kissane - BofA Merrill Lynch
Bill Carcache - Macquarie Research
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Good afternoon, and welcome to Visa Inc.'s Fiscal 2011 Second Quarter Earnings Conference Call. With us today are Joe Saunders, Visa's Chairman and Chief Executive Officer; and Byron Pollitt, Visa's Chief Financial Officer. This call is currently being webcast over the Internet, and can be accessed on the Investor Relations section of our website at www.investor.visa.com.
A replay of the webcast will also be archived on our site for 30 days. The PowerPoint deck containing highlights of today's commentary was posted to our website prior to this call. Let me also remind you that this presentation may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
By their nature, forward-looking statements are not guarantees of future performance, and as a result from a variety of factors, actual results could differ materially from such statements. These include setbacks in the global economy and the impact of new financial reform regulations. Additional information concerning these factors is available on our last 10-K on file with the SEC. It can be accessed through the SEC website and the Investor Relations section of our website.
For historical non-GAAP and pro forma related financial information disclosed on this call, related GAAP measures and other information required by Regulation G of the SEC are available in the financial and statistical summary accompanying our fiscal second quarter earnings press release. This release can also be accessed through the Investor Relations section of our website. And with that, I'll turn the call over to Joe.
Thanks, Jack. And as always, thanks to all of you for joining us today. Visa delivered another quarter of solid financial performance posting net operating revenue of over $2.2 billion, a 15% increase over the same period last year. As has been the case for over a year now, these revenue gains were driven by double-digit growth in payment volume, cross-border volume, and Visa-processed transactions from across the globe.
Notably, 62% of our total revenue growth came from outside the United States, getting us progressively closer to our stated objective of having our business outside the United States represent more than 1/2 of our revenue by fiscal 2015.
Net income for the quarter were $881 million, a 23% increase over the prior year. This equates to diluted earnings per share of $1.23, a 28% increase over the second quarter of 2010. In the second quarter, we effectively repurchased an additional $630 million worth of shares nearly exhausting our $1 billion authorization first announced at the beginning of this fiscal year.
Given that, and recognizing our ongoing commitment to return excess cash to shareholders, today, we're pleased to announce that our Board recently authorized a new $1 billion share repurchase program. This brings our total amounts of repurchases in fiscal 2011 to $2.8 billion. Byron will provide some additional detail on the specifics of the activity.
Before covering some of the business highlights from the quarter, I'd like to first address the ongoing legislative dialogue in Washington in the industry's efforts to address the Durbin Bill. Reiterating what I said on last quarters call, since the introduction of the Durbin amendment, Visa has worked with the industry to help educate legislators on the unintended consequences of this piece of legislation. And our efforts are gaining increasing traction.
As you know, Senators Tester and Carter have introduced legislation calling for a delay in the study of the Durbin Bill. The Senators' efforts have generated support from a large, growing and diverse group of individuals and organizations who are concerned about the unintended, anticonsumer consequences of debit regulation. We believe strongly that Congress should examine what the real impact of this regulation will be on consumers, the financial institutions that serve them, the payment system and the economy as a whole. This would be the reasonable and rational course of action. To that end, we are hopeful that the Senate will consider Senators Tester and Corker's Bill in the very near future.
That said, no matter what happens with Durbin, we will continue to compete in and lead the U.S. electronic payments market, and be a growth company for years to come.
I'll now turn to Business Developments from the past quarter that underscore our focus on driving global revenue growth today, while also setting the stage for future growth through new and innovative ways to pay. As ever, our strong relationships with clients continue to help drive our success. In addition to delivering solid financial gains in the second fiscal quarter, we were successful in advancing our strategy of growing and protecting our core business through key wins and relationship renewals with financial institutions and merchants.