Updated from Wednesday, Feb. 3
SAN FRANCISCO (
shares got a boost in after-hours action Wednesday after the payments firm posted better than expected results for the fourth quarter and showed more confidence in its revenue outlook for the full year.
The stock rose 2.7% after hours Wednesday to $85.80.
Visa reported first-quarter earnings of $763 million, or $1.02 a share, for the three months ended Dec. 31, up from a year-ago equivalent profit of $574 million, or 74 cents a share, and ahead of Wall Street's consensus estimate of 91 cents a share.
Net operating revenue rose 12.7% to $1.96 billion compared to the prior year, driven by "strong contributions" across all revenue categories, in particular data processing revenues and international transaction revenues, Visa said. The average estimate of analysts polled by
was for revenue of $1.92 billion.
Operating expenses fell by 4% to $743 million, helped by a $41 million pre-tax gain related to the prepayment litigation settlements.
Visa said that growth in payments volume for the quarter ending Dec. 31 rose 8.5% on a constant basis compared to the prior year period to $769 million. For the December-ending quarter transactions processed rose 12% to 10.9 billion vs. the prior year. More than 1.8 billion Visa cards were in effect for the September-ending quarter, up 5% in the same year-over-year comparison.
"By all measures, Visa's fiscal first quarter was a strong start to the new year, as we continued to execute well against our business plan," Visa's Chairman and CEO Joseph Saunders said in a statement. "We were able to capitalize on the secular trend to digital currency and grow revenues, as we expanded our payments network and processing capabilities to drive transaction growth through effective marketing programs."
Visa said it repurchased 5.5 million shares at an average price of $78.78 for a total of $432 million during the December quarter under the $1 billion buyback authorization it announced in October.
For fiscal 2010, Visa affirmed its outlook for earnings per share growth of greater than 20%, and annual free cash flow of more than $2 billion. It adjusted its revenue view positively, however, forecasting revenue growth of 11% to 15% for the year. In its third-quarter report on Oct. 27, the company qualified that projection, saying it anticipated revenue growth at the low end of the same range.
shares were following Visa's lead in after-hours action, moving 1.2% higher to $250.50 after declining nearly 2% during Wednesday's session. Visa's main rival is slated to report its quarterly results before the opening bell on Thursday. Wall Street's current consensus analyst estimate is for earnings of $2.46 a share in the December period on revenue of $1.3 billion.
--Written by Laurie Kulikowski in New York.