Visa Inc. Tops Expectations as Earnings Jump 15%

Thanks to strong revenue growth, Visa announced another impressive quarter as its earnings per share rose 15% over last year to stand at $2.17.

Jul 24, 2014 at 5:51PM

After the market closed today Visa (NYSE:V) announced its earnings per share stood at $2.17 in the third quarter of its 2014 fiscal year, a 15% gain over the same period last year.

The driving forces behind the growth came from gains in its data processing and service revenues, which rose by $130 million and $119 million, respectively. However these were partially offset by the fact Visa reported a sizable increase in its client incentives, the fees it pays to financial institutions in an effort to build the volume of its payments, which rose by 23%, or $117 million.


In total its revenue rose by 5% to stand at $3.2 billion. In addition Visa also recognized a 3% decline in its operating expenses, which fell by $38 million to stand at $1.1 billion.

Visa's net income rose 11% to stand at $1.4 billion. The reason for the higher percentage gain in its earnings per share was the fact the company has seen its shares outstanding fall by 3.7% over the last year. It has continued to repurchase its shares, and $1.2 billion of repurchases were made in the most recent quarter. Based on the current authorization from its board of directors, it still has $1.9 billion of share repurchases available.

"We are pleased to report 15% earnings-per-share growth in the face of a continued, subdued global economy," said the CEO of Visa, Charlie Scharf, in the earnings announcement. "As expected, revenue growth was affected by a strong U.S. dollar and tepid growth from cross-border transactions. More importantly, global payments volume and processed transactions remained healthy and strong."

Visa saw its worldwide total volume grow by 9.9% on a constant dollar basis to stand at $1.8 trillion. Interestingly enough, its credit volume in the U.S. grew 12%, whereas its international growth stood at 9.7%. However on the debit side of things, international growth was up 11%, and U.S. growth was up 7.1%.

Perhaps the one sign of concern for investors came when Visa updated its revenue growth expectation to between 9% and 10% versus the previously announced 10% to 11%. However it did note it anticipates its earnings-per-share growth will be between 17.5% and 18.5%.

"While some of the headwinds will likely continue in the short-term, we are confident our investments in products such as Visa Checkout, new technologies like tokenization, and new relationships with financial institutions and merchants will continue to drive double-digit revenue growth over the long-term," Scharf said to conclude his remarks.

According the 30 analysts polled by Yahoo! Finance, the $2.17 in earnings per share seen in the second quarter topped the average expectation of $2.10 per share.

While the slight lowering of guidance may cause some investors concerns, the third quarter of its 2014 fiscal year marked another strong one for Visa.

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

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

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, 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

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