Visa Inc. Delivers 26% Increase in Net Income

Thanks to a tax benefit, Visa saw its net income jump to $1.6 billion in the second quarter of its 2014 fiscal year.

Apr 24, 2014 at 5:01PM

After the market closed today Visa (NYSE:V) announced its net income rose by 26% in the quarter ending March 31 -- the second quarter of its 2014 fiscal year -- to $1.6 billion. Its earnings per share rose from $1.92 during the second quarter of the 2013 fiscal year to $2.52 in the most recent quarter, a gain of 31%.

Visa

A major reason behind this growth was a realized tax benefit of $218 million. Visa noted that excluding this benefit its earnings per share stood at $2.20, still delivering a gain of 15% over the prior-year period. In total the company saw its revenue increase by 7% to $3.2 billion, however the strengthened value of the U.S. dollar negatively affected its earnings growth by 2 percentage points. In total, its income before taxes rose 11% to $2.1 billion.

"Our underlying business drivers remained strong during the fiscal second quarter with payments volume continuing to grow at solid levels," noted the CEO of Visa, Charlie Scharf, in the earnings announcement. "As expected, softer net revenue growth was affected by a strengthening U.S. dollar and difficult year-over-year comparisons due to non-recurring items."

In total, on a constant dollar basis -- which excludes currency impacts -- Visa saw its payments volume increase by 12% in the second quarter to $1.1 trillion and its total transactions also increased by 11% to 15.4 billion.

In addition the company noted it had repurchased $1.1 billion worth of its common stock during the first three months of 2014 at an average price of $217.61 per share. Its shares outstanding have fallen by roughly 4% over the last year, from 660 million to 634 million.

Visa also updated its expectations for the full 2014 fiscal year, suggesting on a constant dollar basis its revenue growth is expected to be between 10% and 11%. It was more vague in its previous release, suggesting revenue growth would be in "low double-digits."

The firm also raised its outlook on its annual operating margin. While Visa was not specific, the firm noted its annual operating margin was expected to be in the "low to mid 60s," up from the expectation of it being in the "low 60s."

Scharf concluded his remarks by noting, "We continue to make substantial investments in products and services that will drive our future growth, while enhancing our financial institution and merchant client relationships."

Patrick Morris has no position in any stocks mentioned. The Motley Fool recommends Visa. The Motley Fool owns shares of 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers