Visa (V) Stock Advances on Strong Earnings Results - TheStreet

NEW YORK (TheStreet) -- Shares of Visa Inc.  (V) - Get Report are up 3.67% to $222.53 in pre-market trade after the global payments technology company reported fiscal fourth-quarter profit that beat analysts' estimates as customer spending abroad showed improvement. 

Net income for the quarter slid 10% to $1.07 billion, or $1.72 a share, from $1.19 billion, or $1.85, a year earlier, the company said in a statement. Adjusted profit, which includes a litigation expense, was $2.18 a share, topping the $2.10 average estimate of 32 analysts surveyed by Bloomberg.

Revenue was up 8.6% to $3.23 billion from a year ago. Analysts surveyed by Bloomberg estimated $3.19 billion. For the fiscal year, revenue gained 7.9% to $12.7 billion.

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Watch the video below for a closer look at Visa's latest quarterly results:

The company said that revenue growth, adjusted for currencies, will be in the "low double digits" for the current fiscal year. The company plans to make changes to some of its processing prices, which will help boost revenue in the second half of next year, Visa said.

The company announced that it had renewed a credit and debit agreement with Bank of America BAC, the company's second biggest client.

Visa also announved a $5 billion share repurchase program. 

TheStreet Ratings team rates VISA INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate VISA INC (V) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 10.9%. Since the same quarter one year prior, revenues slightly increased by 5.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • V has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.45, which illustrates the ability to avoid short-term cash problems.
  • VISA INC has improved earnings per share by 15.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, VISA INC increased its bottom line by earning $7.58 versus $3.13 in the prior year. This year, the market expects an improvement in earnings ($8.99 versus $7.58).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the IT Services industry average. The net income increased by 11.0% when compared to the same quarter one year prior, going from $1,225.00 million to $1,360.00 million.
  • The gross profit margin for VISA INC is rather high; currently it is at 67.48%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 43.10% significantly outperformed against the industry average.
  • You can view the full analysis from the report here: V Ratings Report

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