Adjusted net income for the three months ended June 30 climbed to $1.06 billion, or $1.56 a share, from $883 million, or $1.26, a year earlier, the San Francisco-based company said today in a statement. The average estimate of 34 analysts surveyed by Bloomberg was $1.45 a share. Adjusted profit excludes a $4.1 billion provision tied to the company’s settlement of a U.S. antitrust lawsuit.
Visa, led by Chief Executive Officer Joseph W. Saunders, 66, has benefitted from a consumer shift from cash to electronic payments that shows no signs of abating, while parrying challenges to its business model. Visa, MasterCard Inc. (MA) and some of the biggest U.S. banks agreed this month to settle the lawsuit brought by merchants who accused the financial firms of rigging credit-card fees.
“Visa once again reported solid global growth in payments volume, cross-border transactions and processed transactions outside the U.S.,” Saunders said in the statement. “We are pleased that we were able to come to a resolution in the merchant litigation.”
Temporary Cut
The accord includes $6.6 billion in payments to retailers and a temporary cut in fees that banks earn on each transaction. Visa’s $4.4 billion share of the settlement would be covered by an escrow account established in cooperation with U.S. banks that owned the company before its 2008 initial public offering. Purchase, New York-based MasterCard, which reports results next week, said the settlement would cost it $790 million.
Visa reported a net loss including the litigation provision of $1.84 billion, or $2.74 a share, compared with net income of $1.01 billion, or $1.43, a year earlier.
Visa climbed 2.2 percent to $124.91 at 5 p.m. in extended trading in New York. The shares have climbed 37 percent in the past 12 months, the third-best performance in the 71-company Standard & Poor’s 500 Information Technology Index after Seagate Technology Plc and Apple Inc. MasterCard’s 30 percent gain ranks fourth.
Profit Outlook
The company updated its profit outlook, saying annual earnings-per-share growth would be in the “low twenties,” up from a May forecast of “high teens to low twenties,” according to the statement.
Saunders also overhauled Visa’s fee structure on debit cards after new U.S. rules took effect in October. The limits on debt-card fees and processing, mandated by the Dodd-Frank Act, may have helped MasterCard wrest market share from Visa, which handled about triple the amount of such purchases than its smaller rival in the fiscal year ended Sept. 30.
The U.S. Justice Department’s antitrust division issued a civil investigative demand on March 13 asking Visa for information about the new strategy, Saunders said in May.
Saunders has said he intends to generate more than half of Visa’s revenue from outside the U.S. by 2015, up from 44 percent in fiscal 2011.
Visa’s share of worldwide purchase transactions on credit and debit cards, including those processed by Visa Europe Ltd., fell 1.1 percentage points last year to 64.67 percent as MasterCard’s share grew by almost 0.5 percentage point to 25.57 percent, according to the Nilson Report, an industry newsletter based in Carpinteria, California.
0 comments:
Post a Comment