G
Image source: Visa.

Investors in Visa (NYSE:V) have been nervous recently about the slowing growth in many formerly strong areas of the world, and they came into Thursday's fiscal first-quarter financial report with concerns about the stock's future direction. But even though the strong dollar knocked down some of the company's results from certain regions, Visa's fundamental growth still showed itself in solid gains on its bottom line. With a commanding presence worldwide that has kept smaller companies like Discover Financial (NYSE:DFS) at bay, Visa expects to keep expanding internationally regardless of growing anxiety about economic prospects around the world. Let's take a closer look at Visa and what its latest results say about its future.

Visa sees solid top-line, bottom-line gains
Visa's fiscal first-quarter results showed that the card giant remains on a growth trajectory. Revenue net of client incentives climbed more than 5% to $3.57 billion, just edging out the consensus forecast among those following the stock. Net income soared 24% to $1.94 billion, and after taking out a one-time item, that worked out to adjusted earnings of $0.69 per share, topping estimates by a penny.

Looking more closely at the numbers, Visa managed to keep its fundamental metrics moving higher. Payment volume grew in constant-dollar terms by 11% to $1.3 trillion, and cross-border volume growth was up 4%. Visa processed 19 billion transactions, 8% higher than in the previous year's quarter, and service revenues climbed 7%. Visa continued to see a sizable contribution from its international business, where revenue from international transactions climbed 6%, hitting the $1.03 billion mark.

Visa also kept its costs in check. Total operating expenses climbed just 2% to $1.176 billion, and declines in personnel and marketing costs were largely responsible for the muted growth on the expense side of the income statement. Client incentives jumped more than 10%, but that in part, reflected the higher transaction volumes Visa has seen.

Visa's strength remained in the U.S., where gross dollar volume rose 9%, and total payment volume climbed 9.5%. The strong dollar was largely responsible for declines in Canada, Latin America, and the Europe/Middle East/Africa segment, and it also held back growth in the Asia-Pacific region. On a constant currency basis, though, double-digit percentage gains in gross dollar volume for the Asia-Pacific and Latin America regions were encouraging, even if they trailed the growth some of Visa's peers have shown.

CEO Charlie Scharf was pleased with the way Visa held up during the quarter. "We continue to be pleased with our financial performance," Scharf said, "given the uneven global economy and the ongoing negative effects of the strong U.S. dollar." The CEO expects its long-term growth will be able to overcome the near-term downward influence of those factors on Visa's business.

Can Visa keep climbing?
Visa also has high hopes for the remainder of the fiscal year. The card giant expects net revenue growth of high single-digit to low double-digit percentages on a constant-dollar basis, allowing three percentage points of headwinds for currency impacts. Visa hopes that will translate into earnings growth in the mid-teens on a constant dollar basis, and that could translate into roughly 10% growth in dollar terms after accounting for expected currency weakness.

A big part of Visa's growth in the coming year will come from its expected acquisition of Visa Europe. The move will bolster Visa's global reach, further enhancing its edge over companies like Discover Financial, which have been less successful in gaining universal acceptance of cards around the world. Visa lacks the diversification Discover Financial gets from Discover's retail banking and lending business, and unlike Discover, Visa doesn't retain any credit risk for its cards. Nevertheless, Visa expects its transaction-based business model will prove out -- and will do even better with Visa Europe pulled back into the fold.

Visa investors were happy with the news, sending the stock up nearly 4.5% in the morning after the announcement. So far, Visa has defied calls for slower growth, and as long as it can capitalize on opportunities to expand its business, it should be able to keep shareholders happy in the long run.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends 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.