Visa Q3 Profit Rises, Shares Up 8%

(RTTNews) - Visa Inc., (V) on Thursday reported an increase in profit for the third quarter, as customers spent more using its cards, with both earnings and revenues trumping Wall Street expectations. Following the results, Visa shares rallied about 8 percent in the after-hours trade on the New York Stock Exchange.

Foster City, California-based Visa's third-quarter profit rose to $1.70 billion or $0.69 per class A share from $1.36 billion or $0.54 per share a year ago.

Excluding an adjustment of the revaluation of its Visa Europe put option, adjusted earnings were $0.74 per share. On average, 33 analysts polled by Thomson Reuters expected earnings of $0.59 per share. Analysts' estimates typically exclude one-time items.

Visa, the world's largest credit and debit card company, said revenues for the third quarter grew 12 percent to $3.52 billion from $3.16 billion last year. Analysts had a consensus revenue estimate of $3.36 billion.

Revenue growth was driven by growth in service, data processing and international transaction revenues, the company said.

"We continue to deliver solid financial results and operating metrics without the help of an improving economic environment. Strong underlying fundamentals continue to offset the drag from geopolitical tension and the strengthening dollar on our business," said CEO Charlie Scharf.

Visa's first-quarter service revenues - based on payments volume in the prior quarter - rose 9 percent to $1.6 billion. Data processing revenues for the quarter increased 6 percent to $1.4 billion, while international transaction revenues climbed 21 percent to $1.0 billion.

Payments volume growth, on a constant dollar basis, for the three months ended March 31, 2015, on which fiscal third quarter service revenue is recognized, was 11 percent over the prior year at $1.2 trillion. Visa processed 18 billion transactions in the quarter, up 8 percent from last year.

Looking forward to the the full year 2015, Visa expects adjusted earnings growth in the mid-teens range, compared to earlier growth outlook of low-end of that range.

In May, Bloomberg had reported that Visa was in preliminary talks to buy former subsidiary Visa Europe Ltd., in a deal worth $20 billion. Visa, Thursday, said it believes there is compelling logic for both Visa Inc. and Visa Europe to merge. The company said it is in talks and expects to end it by October.

V closed Thursday's trading at $71.75, down $0.22 or 0.31%, on the NYSE. The stock, however, gained $5.22 or 7.28%, in the after-hours trade.