Visa Beats on Profit, Revenue

SAN FRANCISCO (TheStreet) -- Visa(V Quote) nudged past Wall Street targets with its fiscal fourth-quarter profit and posted stronger-than-expected revenue even as consumers continued to cut back on their use of plastic during the period.

The company partly attributed the results to its ongoing shift to electronic payments, as well as cost cuts, which helped offset a decline in payment volumes of 2% to $687 billion from a year ago.

Excluding restructuring costs and amortization charges, Visa said it's adjusted earnings came to $552 million, or 74 cents per class A common share, beating analysts' estimates by two pennies.

Revenue rose 10% to $1.9 billion from a year ago. That, too, exceeded Wall Street targets. The 20-plus analysts who cover the charge-card outfit were, on average, expecting revenue of $1.78 billion.

A year ago, Visa lost $356 million on revenue of $1.7 billion. On an adjusted basis, it earned $448 million, or 58 cents a share, last year.

As for outlook, Visa affirmed its 2010 outlook for revenue growth of 11% to 15%, most likely on the lower end of that range, and per-share adjusted earnings growth of more than 20%.

The company also said it expects to generate more than $2 billion in free cash flow in 2010, adding that its annual operating margin will approach the mid 50% range. It expects capital expenditures to range from $200 million to $250 million for the year. In addition, Visa's board approved a $1 billion common stock buyback program.

Visa shares finished Tuesday's session up 1.5% at $73.90, and were slightly higher in after-hours action, rising another 0.8% to $74.50.

-- Written by Scott Eden in New York

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