Visa Profit Rises 11%, Announces Stock Split

(RTTNews) - Visa Inc (V) on Thursday reported an 11 percent increase in profit for the first quarter, as customers spent more using its cards during the holiday quarter, amid a better job climate and lower gasoline prices. Both earnings and revenues for the quarter trumped Wall Street expectations.

The payment card processor maintained its outlook for fiscal year 2015 and authorized a four-for-one stock split. Following the results, Visa shares gained about 4 percent in the after-hours trading.

Foster City, California-based Visa's first-quarter profit rose to $1.57 billion or $2.53 per class A share from $1.41 billion or $2.20 per class A share a year ago. On average, 34 analysts polled by Thomson Reuters expected earnings of $2.49 per share for the first quarter. Analysts' estimates typically exclude one-time items.

The world's largest credit and debit card company, Visa said its operating revenues climbed 7 percent to $3.38 billion from $3.16 billion a year ago. Thirty-two analysts had a consensus revenue estimate of $3.34 billion for the quarter.

Revenue growth was driven by strong growth across service, data processing and international transaction revenues. However, a strong U.S. dollar hurt revenues by about 2 percentage points.

"Visa kicked-off fiscal 2015 delivering another solid quarter of revenue and earnings growth. While the challenges of the macro global environment don't seem to abate, our results have remained consistent and reflect the strength and underlying resilience of our business model," said CEO Charlie Scharf.

Visa's first-quarter service revenues - based on payments volume in the prior quarter - rose 9 percent to $1.5 billion. Data processing revenues for the quarter increased 9 percent to $1.4 billion, while international transaction revenues climbed 9 percent to $970 million.

Payments volume growth, on a constant dollar basis, for the three months ended September 30, 2014, on which fiscal first quarter service revenue is recognized, was 11 percent over the prior year at $1.2 trillion. Visa processed 17.6 billion transactions in the quarter, up 10 percent from last year.

Looking ahead, Visa reaffirmed its full-year 2015 revenue outlook growth in low double digits and continues to see earnings growth in mid teens.

Visa has authorized a four-for-one stock split. On March 18, shareholders will get three additional shares for every one share held. Trading will begin on a split-adjusted basis on March 19.

V closed Thursday's regular trading at $248.00, up $1.64 or 0.67%, on the NYSE. The stock further gained $9.45 or 3.81%, in after-hours trade on the NYSE.