Visa Beats Estimates but Gets No Glory

Credit cards
Credit cards

Visa Inc. (NYSE: V) reported first-quarter fiscal 2013 results after the markets closed today. Adjusted earnings per share (EPS) were $1.93 on revenues of $2.85 billion. In the first quarter of 2011, the credit card issuer reported EPS of $1.49 on revenues of $2.55 billion. The Thomson Reuters estimates called for EPS of $1.79 and $2.82 billion in revenue.

On a GAAP basis, Visa reported quarterly EPS of $1.82. Adjusted earnings included a gain of $0.11 a share for a catch-up tax benefit.

The company's CEO said:

Our results include significant continued investments in our core business, accelerating international expansion and the deployment of next-generation payment solutions for the benefit of our financial institution and merchant partners. We have been committed to using our capital wisely and that includes returning capital to stockholders through dividends and share repurchases.

Visa raised its share repurchase program to total of $2.9 billion.

The company's outlook for the rest of the fiscal year projects revenue growth in the low double digits and adjusted annual diluted EPS growth in the "high teens." Annual free cash flow will rise to about $6 billion as a result of further tax benefits.

The consensus analysts' estimate for second quarter EPS is $1.81 and the full-year estimate is $7.27. For the second quarter of 2012, the company reported EPS of $1.60, and EPS for the full year of $6.20.

Visa beat the consensus EPS and revenue estimates, but a bigger share buyback program is not compelling enough to move the stock much higher. Mastercard Inc. (NYSE: MA) doubled its dividend and raised the amount in its buyback program, so Visa's moves pale a bit in comparison.

After closing up 0.8% at $160.82 against a 52-week trading range of $106.06 to $162.77, shares have dropped 0.5% to $160.00 in after-hours trading. Thomson Reuters had a consensus analyst price target of around $166.80 before today's report.

Filed under: 24/7 Wall St. Wire, Banking & Finance, Earnings Tagged: MA, V