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%.


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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information