SAN FRANCISCO, July 27, 2011 /PRNewswire/ --
- GAAP quarterly net income of $1.0 billion including a non-operating gain related to the Visa Europe put option revaluation
- Adjusted quarterly net income of $883 million or $1.26 per diluted class A common share excluding the revaluation of the Visa Europe put option
- The Company authorized a new $1 billion share repurchase program
Visa Inc. (NYSE: V) today announced financial results for the Company's fiscal third quarter 2011 ended June 30, 2011. GAAP net income for the quarter, inclusive of a non-cash, non-operating gain related to the Company's revaluation of its Visa Europe put option, was $1.0 billion.
On an adjusted basis, which excludes the revaluation of the Company's Visa Europe put option, net income for the quarter was$883 million, an increase of 23% over the prior year, and diluted class A common stock earnings per share were $1.26, an increase of 29% over the prior year. The weighted-average number of diluted class A common shares outstanding was approximately 704 million. The Company's adjusted quarterly net income per class A common shares outstanding is a non-GAAP financial measure that is reconciled to its most directly comparable GAAP measure in the accompanying financial tables.
GAAP net operating revenue in the fiscal third quarter of 2011 was $2.3 billion, an increase of 14% over the prior year and driven by strong double-digit growth in service revenues, data processing revenues and international transaction revenues. Currency fluctuations contributed two percentage points of growth towards quarterly net operating revenues.
"Visa delivered another quarter of strong financial and operational performance as we benefitted from growth in global payments volume, and solid cross border and processed transaction growth," said Joseph Saunders, Chairman and Chief Executive Officer of Visa Inc. "As we address the new regulatory landscape, we are prepared to deliver on our financial goals and remain an industry leading growth company in the global transactions space."
"Visa is a diverse global enterprise, with strong positions in both developed and emerging markets around the world, and we are committed to further diversifying our business and accelerating growth in key markets worldwide," said Saunders. "We are executing on our growth strategy, investing heavily in innovation and taking important steps to bring new products and solutions to our partners and consumers."
Fiscal Third Quarter 2011 Financial Highlights:
Payments volume growth, on a constant dollar basis, for the three months ended March 31, 2011, on which fiscal third quarter service revenue is recognized, was a positive 13% over the prior year at $862 billion.
Payments volume growth, on a constant dollar basis, for the three months ended June 30, 2011, was a positive 13% over the prior year at $941 billion.
Cross border volume growth, on a constant dollar basis, was a positive 14% for the three months ended June 30, 2011.
Total processed transactions, which represent transactions processed by VisaNet, for the three months ended June 30, 2011, were 13 billion, a positive 11% increase over the prior year.
For the fiscal third quarter 2011, service revenues were $1.1 billion, an increase of 21% versus the prior year, and are recognized based on payments volume in the prior quarter. All other revenue categories are recognized based on current quarter activity. Data processing revenues rose 12% over the prior year to $886 million. International transaction revenues, which are driven by cross border payments volume, grew 15% over the prior year to $662 million. Other revenues, which include the Visa Europe licensing fee, were $167 million, a 10% decrease over the prior year. Client incentives, which are a contra revenue item, were $448 millionand represents 16% of gross revenues.
Total operating expenses on a GAAP basis were $977 million for the quarter, a 10% increase over the prior year.
Cash, cash equivalents, restricted cash, and available-for-sale investment securities were $6.7 billion at June 30, 2011.
Visa's effective tax rate was 38% for the quarter ended June 30, 2011, excluding the revaluation of the Visa Europe put option.
Notable Events:
On June 6, 2011, the Company acquired Fundamo, a leading platform provider of mobile financial services for mobile network operators and financial institutions in developing economies, for total consideration of approximately $110 million paid with cash on hand. In addition, the Company announced a new, long-term commercial agreement with Monitise plc, a leading provider of mobile money solutions for financial institutions in more developed geographies. The combination of acquiring Fundamo and expanding the relationship with Monitise will enable Visa to deliver best-in-class mobile financial services and payments capabilities to consumers across the full spectrum of uses, geographies and mobile environments from basic services on simple handsets to more advanced services for smart phone owners.
During the quarter, the Company received regulatory approval for the sale of its 10 percent investment in Visa Vale issuer Companhia Brasileira de Solucoes e Servicos, or CBSS, to Banco do Brasil and Bradesco. This resulted in a pre-tax gain, net of transaction costs, of $85 million recognized in the investment income net line on the consolidated statements of operations. The amount of the gain net of tax was $44 million.
During the three months ended June 30, 2011, the Company repurchased approximately 13.7 million class A common shares, at an average price of $77.36 per share, for a total cost of $1.1 billion.
As announced on July 22, 2011, the Board of Directors declared a quarterly dividend in the aggregate amount of $0.15 per share of class A common stock (determined in the case of class B and class C common stock on an as-converted basis) payable onSeptember 7, 2011, to all holders of record of the Company's class A, class B and class C common stock as of August 19, 2011.
Today, the Company announces that its Board of Directors has authorized a new $1 billion class A share repurchase program. The authorization will be in place through July 20, 2012, and is subject to further change at the discretion of the Board.
Financial Outlook:
Visa Inc. updates its financial outlook for the following metric for 2011:
- Capital expenditures: Moderately above $300 million.
Visa Inc. affirms its financial outlook for the following metrics through 2011:
- Annual net revenue growth: 11% to 15% range;
- Client incentives as a percent of gross revenues: top end of the 16% to 16.5% range;
- Marketing expenses: Less than $900 million;
- Annual operating margin: About 60%;
- GAAP tax rate: 36.5% to 37% range, excluding the revaluation of the Visa Europe put option;
- Annual diluted class A common stock earnings per share growth of greater than 20%; and
- Annual free cash flow in excess of $3 billion.
Visa Inc. affirms its financial outlook for the following metrics through 2012:
- Annual net revenue growth: high single to low double digit range; and
- Annual diluted class A common stock earnings per share growth: mid to high teens range.
Fiscal Third Quarter 2011 Earnings Results Conference Call Details:
Visa's executive management team will host a live audio webcast beginning at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) today to discuss the financial results and business highlights. All interested parties are invited to listen to the live webcast at http://investor.visa.com. A replay of the webcast will be available on the Visa Investor Relations website for 30 days. Investor information, including supplemental financial information, is available on Visa Inc.'s Investor Relations website at http://investor.visa.com.
About Visa
Visa is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world's most advanced processing networks—VisaNet—that is capable of handling more than 20,000 transaction messages a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, ahead of time with prepaid or later with credit products. For more information, visitwww.corporate.visa.com.
