Visa: In Charge

Financial services firm Visa (NYSE: V) is set to release its latest quarterly earnings in the week ahead, after a recent groundswell of M&A, as well as amid an overall uptick in the level of U.S. household debt

The California-based credit card giant has been generally gobbling-up companies, as well as forming strategic investments and partnerships, to help advance its payment network’s operational capabilities.

In mid-September, for example, the firm said it completed its purchase of Verifi, with an aim to strengthen its dispute resolution capabilities; and earlier in 2019, it touted a host of other acquisitions, including cross-border payment servicer Earthport; the token services and ticketing businesses of Rambus; as well as next-gen payment software provider Payworks.

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Overall, Visa CFO Vasant Prabhu had said that the company’s recent purchases “significantly enhance our capabilities, extending our reach to over 99% of global bank accounts in 88 markets, facilitating tokenization of all types of transactions beyond our own, streamlining dispute resolution, and enabling omnichannel payment processing” through Visa’s e-commerce platform CyberSource.

In its fiscal third-quarter earnings release, Visa generated US$5.8bn in net revenues, an 11% year-on-year increase, amid an 11% rise in adjusted net income to US$3.1bn and a 14% spike in adjusted earnings per share of US$1.37.

For its fiscal full-year 2019, Visa said it expects annual net revenue growth in the low double-digits, while in the three months to September, market participants anticipate earnings of around US$1.45 per share on revenues of a little more than US$6bn.

Against this backdrop, shares of Visa have returned close to 35% year-to-date in 2019, with its stock up around 44.15% since its latest 52-week low set December 24, 2018. However, the company’s equity had fallen close to 1.9%, with rival Mastercard (NYSE: MA) off more than 2.0% intraday Friday, after weak Chinese economic data spurred renewed jitters about potential ramifications for global growth.

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DISCLOSURE: AUTHOR SECURITY HOLDING: NO POSITIONS

The author does not hold any positions in the financial instruments referenced in the materials provided.

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