Visa beats earnings, payments volume disappoints as stock falls

|


  • Visa shares drop 1.9%
  • Stock up 42% over the past year
  • “Uncertain geopolitical environment” blamed for low transactions

Visa Inc. announced earnings and revenue that beat expectations while also reporting low payments volume growth. In response, the company’s stock went down 1.9% to $135.01 on Thursday.

After reporting adjusted net income of $3 billion for the first quarter, equating to $1.30 per share, and an increased net revenue from $4.86 billion last year to $5.5 billion, the financial services giant might have expected more from Wall Street. Analysts had expected the company to earn $1.25 per share.

However, payments volume and processed transactions rose less than expected. Forecasts had predicted a 12.4% hike, but they only achieved 11% year on year.

Visa cited exchange rates as having a negative impact on earnings per share and net revenue growth, attributing approximately 0.5 percentage points loss to each. It wasn’t all bad news as international transaction revenue rose by 11% to hit $1.9 billion and data processing revenue increased by 15% from the previous year to reach a figure of $2.5 billion.

Visa CEO Alfred Kelly Jr. said in a statement: “We delivered strong results in our fiscal first quarter, generating 13% revenue and 21% earnings per share growth against the backdrop of an uncertain geopolitical environment.”

“As we look ahead in 2019, we remain focused on our strategy to grow the pie for payments through deeper and new relationships, expansion into new segments and payment flows and a broadening of our acceptance footprint,” the statement continued.

The company said it expects to see annual net revenue growth in the low double digits as part of its full-year 2019 financial outlook.

Visa stock prices have gone up by 42% over the past year; in comparison, the Dow Jones Industrial Average has seen a 17% rise overall.

Brian Ducey

Brian graduated from Chaminade High School and the University Of Vermont Kalkin School Of Business with a concentration in Finance. He began his career with Knight Capital Markets, working his way to market maker. Brian later expanded his market repertoire, working with various sell-side research brokerage firms, such as Sidoti & Co., and William O’Neill & Co., as an Account Executive. With over 20 years-experience in the financial industry, Brian has built a unique perspective into “market intelligence” understanding an ability to read the tape and apply second level thinking in a fast paced environment. Brian also carried several market licenses, including the series 7, 24, 55, 65, and 63 licenses as well as previously passing The Connecticut Life and Health Insurance Exam