Visa Beats on Both Top and Bottom Lines

Seth Jayson, The Motley Fool
Updated

Visa (NYS: V) reported earnings on Oct. 31. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended Sep. 30 (Q4), Visa beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP earnings per share grew significantly.


Gross margins shrank, operating margins dropped, net margins grew.

Revenue details
 Visa reported revenue of $2.73 billion. The 31 analysts polled by S&P Capital IQ wanted to see a top line of $2.67 billion on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $2.38 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $1.54. The 34 earnings estimates compiled by S&P Capital IQ predicted $1.50 per share. GAAP EPS of $2.05 for Q4 were 60% higher than the prior-year quarter's $1.28 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 82.8%, 90 basis points worse than the prior-year quarter. Operating margin was 55.8%, 140 basis points worse than the prior-year quarter. Net margin was 60.9%, 2,400 basis points better than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $2.81 billion. On the bottom line, the average EPS estimate is $1.78.

Next year's average estimate for revenue is $11.51 billion. The average EPS estimate is $7.17.

Investor sentiment
 The stock has a four-star rating (out of five) at Motley Fool CAPS, with 4,816 members out of 5,081 rating the stock outperform, and 265 members rating it underperform. Among 1,003 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 952 give Visa a green thumbs-up, and 51 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Visa is outperform, with an average price target of $139.28.

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The article Visa Beats on Both Top and Bottom Lines originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Visa. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy

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