The 10-second takeaway
For the quarter ended March 31 (Q2), Visa beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share expanded significantly. GAAP earnings per share dropped significantly.
Gross margins contracted, operating margins grew, net margins contracted.
Visa logged revenue of $2.96 billion. The 32 analysts polled by S&P Capital IQ expected to see sales of $2.87 billion on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $2.58 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.92. The 33 earnings estimates compiled by S&P Capital IQ predicted $1.81 per share. Non-GAAP EPS of $1.92 for Q2 were 20% higher than the prior-year quarter's $1.60 per share. GAAP EPS of $1.36 for Q2 were 29% lower than the prior-year quarter's $1.91 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 83.6%, much worse than the prior-year quarter. Operating margin was 62.9%, 60 basis points better than the prior-year quarter. Net margin was 42.9%, 720 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $2.90 billion. On the bottom line, the average EPS estimate is $1.77.
Next year's average estimate for revenue is $11.69 billion. The average EPS estimate is $7.47.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 4,876 members out of 5,141 rating the stock outperform, and 265 members rating it underperform. Among 1,057 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,014 give Visa a green thumbs-up, and 43 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 $174.06.
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