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Visa Beats on Profit, Revenue

Visa exceeds Wall Street targets on the bottom and top lines, but its shares slip in after-hours trading.
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SAN FRANCISCO (TheStreet) -- Visa (V) - Get Free Report 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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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.