Visa Q4 Profit Rises; Announces $5.0 Bln Share Buyback; To Acquire Visa Europe

(RTTNews) - Visa Inc. (V) reported fourth-quarter net income of $1.5 billion or $0.62 per share, an increase of 41% and 44% over the prior year, respectively. Net income in the fiscal fourth quarter was $1.5 billion or $0.62 per share, an increase of 12% and 14% over the prior year adjusted results, respectively. On average, 33 analysts polled by Thomson Reuters expected the company to report profit per share of $0.63 for the quarter. Analysts' estimates typically exclude special items.

Net operating revenue in the fiscal fourth quarter was $3.57 billion, an increase of 11% nominally or 13% on a constant dollar basis over the prior year. The company said the strengthening of the U.S. dollar versus the prior year quarter negatively impacted net operating revenue growth by approximately 3 percentage points. Analysts expected revenue of $3.57 billion for the quarter.

GAAP net income for the full-year 2015 was $6.3 billion or $2.58 per share, an increase of 16% and 20% over the prior year, respectively. Adjusted net income for the full-year 2015 was $6.4 billion or $2.62 per share, an increase of 13% and 16% over the prior year's adjusted results, respectively. Net operating revenue for fiscal 2015 was $13.9 billion, an increase of 9% nominally or 12% on a constant dollar basis over the prior year, driven by solid revenue growth contributions from service, data processing and international transaction revenues.

Charlie Scharf, Chief Executive Officer of Visa Inc. "Although fiscal 2016 reported growth rates will be negatively impacted by a strong US dollar and an uneven global economy, we are well positioned for strong success in 2017 and well beyond."

For full-year 2016, Visa expects: annual net revenue growth to be in high single-digit to low double-digit range on a constant dollar basis, with an expectation of about three percentage points of negative foreign currency impact; annual adjusted class A common stock earnings per share growth to be in low-end of the mid-teens range on a constant dollar basis, with an expectation of about four percentage points of negative foreign currency impact.

The board of Visa Inc. has authorized a new $5.0 billion class A common stock share repurchase program. At September 30, 2015, the company had $2.8 billion of remaining funds, authorized by the board, available for share repurchase under the current program.

Separately, Visa Inc. and Visa Europe Ltd. announced a definitive agreement for Visa Inc. to acquire Visa Europe, creating a single global company. The transaction consists of upfront consideration of 16.5 billion euros, with the potential for an additional earn-out of up to 4.7 billion euros payable following the fourth anniversary of closing, for a total value of up to 21.2 billion euros. The upfront consideration comprises 11.5 billion euros of cash and preferred stock convertible into Visa Inc. class A common stock valued at 5 billion euros.

Visa Europe, an association owned and operated by member banks and other payment service providers, is the payments leader in Europe. Visa expects the transaction to be dilutive to fiscal full-year 2016 adjusted earnings per share in the low single-digit percentage point range.