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Visa (NYSE:V) shares jumped 4% in after-hours trading as investors digested the company's latest earnings report. But were the results as good as the market suggests?

Here's what investors need to know now.

The raw numbers
Quarterly income was down 10% from the year-ago period. Full-year net income was up 9% from last year, and up 14% on a per-share basis.

The decline in quarterly income was largely due to a special item -- Visa took a $450 million charge as a deposit into its litigation escrow account.

Adjusted net income, which excludes the impact of litigation deposits, showed impressive improvement. Adjusted earnings improved 14% from the year-ago period, while full-year income rose 15%. That corresponds to per-share growth of 17% and 19% for the quarter and full year, respectively.

But here's what really mattered
No number may have been more important for Visa this quarter than the marked improvement in cross-border transactions and international revenue. Cross-border transaction volume grew 10% year over year, leading to a 5% jump in international transaction revenue.

Last quarter it became evident that international transactions were a weakness for Visa. Volume grew only 5%, and revenue rose just 1%. Visa executives explained that the revenue slowdown was due to lower foreign exchange volatility. But Wall Street wasn't eager to digest the message, given that MasterCard (NYSE:MA) posted a 16% increase in volume and 14% increase in revenue in the same quarter. With revenue growing alongside volume once again, all is calm on the international front.

Across the company, debit and credit card payments volume each rose 10% year over year on a nominal basis. 

Furthermore, the company beat its own expectations for incentive spending. In the third fiscal quarter, Visa guided for incentive spending that implied incentives would consume greater than 19% of revenue in the fourth quarter. The actual figure was 19%. We'll soon know what exactly drove higher incentive costs. Management merely telegraphed that increased incentives were part of contract renewals with some of its larger card issuers.

Guidance looks great
Visa isn't shy with earnings guidance. The company projected revenue growth in the low double digits, with incentives taking 17.5% to 18.5% of revenue in fiscal 2015. Operating margins were guided within their historical range in the "mid 60s."

Ultimately, what really matters are raw earnings and free cash flow. Visa's forecast suggests "mid-teens" growth in earnings per share, helped in part by a new $5 billion share repurchase authorization, and free cash flow in excess of $6 billion for fiscal 2015.

In all, Visa ended its fiscal 2014 year with a bang. Cross-border transactions and revenue improved dramatically, giving hope that further improvement could be in store for fiscal 2015, while incentive spending came in under the company's forecast, helping it deliver impressive growth in adjusted net income. It's just another solid quarter for one of the biggest growth stories on Wall Street today.


Jordan Wathen has no position in any stocks mentioned. The Motley Fool recommends and owns shares of MasterCard and Visa. Try any of our Foolish newsletter services free for 30 days. 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.