Visa shares little changed following beat on earnings

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Last Update: 07-Feb-13 08:21 ET

Visa (V $159.10 -1.72) reported first quarter earnings of $1.82 per share, excluding $0.01 benefit, $0.03 better than the Capital IQ Consensus Estimate of $1.79, while revenues rose 11.7% year/year to $2.85 billion versus the $2.82 bln consensus. Payments volume growth, on a constant dollar basis, for the three months ended September 30, 2012, on which fiscal first quarter service revenue is recognized, was 6% over the prior year at $1.0 trillion. Payments volume growth, on a constant dollar basis, for the three months ended December 31, 2012, was 9% over the prior year at $1.1 trillion. Cross-border volume growth, on a constant dollar basis, was 11% for the three months ended December 31, 2012. Total processed transactions, which represent transactions processed by VisaNet, for the three months ended December 31, 2012, were 14.2 billion, a 4% increase over the prior year. Visa sees annual free cash flow: ~$6 billion. This increase is attributable to tax benefits to be realized during fiscal 2013 related to non-recurring litigation escrow payments of ~$4.4 billion made during Q1. Visa (V) affirmed its financial outlook for the following metrics for fiscal 2013: Annual net revenue growth: Low double digits (consensus +11%); Client incentives as a percent of gross revenues: 18% to 18.5% range; Marketing expenses: Under $1 billion; Annual operating margin: About 60%; Tax rate: 30% to 32% range; Adjusted annual diluted class A common stock earnings per share growth: High teens (consensus +17%).