Personal Finance
V

Smooth Integration with Visa Europe Fuels Another Strong Quarter for Visa Inc

Bar graph showing Visa Inc's Total Payment volume growh year over year

Visa Inc (NYSE: V) shareholders certainly had reason to cheer when the company reported its quarterly results. Net operating revenue was almost $4.5 billion, a 25% increase year over year. Adjusted net income and earnings per share both increased 23% year over year. Other company metrics also popped. Total payment volume increased to $1.8 trillion, a 39% increase.

Bar graph showing Visa Inc's Total Payment volume growh year over year

Image source: Visa Inc 2017 Q1 Earnings Slide

Visa originally guided for total integration costs of $450-500 million over three years. When asked if that had changed, CFO Vasant Prabhu responded that the company only expected to spend $80 million this year toward integration costs but was not yet ready to adjust its three-year guidance.

A far more important question than the surface numbers or guidance is whether Visa can retain its many large card-issuing bank clients in Europe once the integration is complete. It is on this front that Kelly seemed to particularly shine in the conference call following the earnings release, easing any lingering concerns from investors.

Kelly began his prepared remarks by stating he had spent much of his first days on the job visiting over 50 clients, government officials in nine countries, and twelve of Visa's global offices. Throughout the conference call, Kelly kept coming back to how much he was dedicated to meeting with clients to ensure that Visa was fulfilling their needs and expectations.

This seemed especially true when it came to retaining Visa Europe's customers. Kelly stated:

We actually bought Visa Europe at a time where we've got a pretty good book of business that's going to be with us for a while. I mean, that said, as I said in my remarks, I'm very, very much a client-focused person. And we're going to work hard with every single one of our clients in Europe as well as around the world, but we do have a lot of good long-term relationships locked up.

Not missing a beat

In one of his last conference calls, former Visa CEO Charlie Scharf stated he was "extremely comfortable" with the European renewal activity Visa was seeing. In that same conference call, Scharf reviewed important multiyear deals Visa had recently signed with the likes of Barclays PLC , Lloyd's Banking Group PLC , and Royal Bank of Scotland Group PLC . The fact that Kelly seems to be following in Scharf's footsteps by highly prioritizing the retention of Visa Europe's large clients bodes very well for Visa's future.

Visa shareholders enjoyed an incredible run under former CEO Charlie Scharf. During Scharf's four year tenure the stock price appreciated about 115%. While one quarter does not a legacy make for new CEO Alfred Kelly, Jr., there was certainly a lot to like in Visa's first quarter results. While it is only natural to question whether Visa can continue excelling under Kelly's leadership, if the company's 2017 first quarter is any indication, the company is in good hands.

10 stocks we like better than Visa

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Visa wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of January 4, 2017

Matthew Cochrane has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Visa. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

V

Other Topics

Stocks

Latest Personal Finance Videos

    #TradeTalks: A Holistic Financial Picture to Give a True Indicator of your Financial Health

    Harvest Founder Nami Baral joins Jill Malandrino on Nasdaq #TradeTalks to discuss the Harvest PRO Index, holistic financial picture to give a true indicator of your financial health, not just a credit score.

    Oct 9, 2020

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More