SAN FRANCISCO, May 5, 2011 /PRNewswire via COMTEX/ -- - GAAP quarterly net income of $881 million or $1.23 per diluted class A common share
- The Company authorized a new $1 billion share repurchase program
Visa Inc. (NYSE: V) today announced financial results for the Company's fiscal second quarter 2011 ended March 31, 2011. GAAP net income for the quarter was $881 million, or $1.23 per diluted class A common share. The weighted-average number of diluted class A common shares outstanding was approximately 714 million.
GAAP net operating revenue in the fiscal second quarter of 2011 was $2.2 billion, an increase of 15% over the prior year and driven by strong double-digit growth in service revenues, data processing revenues and international transaction revenues. Currency fluctuations contributed a positive 2% towards quarterly net operating revenues.
"Visa delivered a solid financial performance in our fiscal second quarter with double-digit growth in payments volume, cross border volume and Visa-processed transactions from across the globe," said Joseph Saunders, Chairman and Chief Executive Officer of Visa Inc. "With a strong first half of our fiscal 2011 year behind us, we remain focused on driving continued transaction growth, maintaining strong financial performance and expense control discipline, and delivering value to our shareholders through share repurchase programs and dividend payments." "In addition to working with our financial institutions and merchant clients to expand card issuance and acceptance for our core products, we are investing in new platforms, channels and technologies that will deliver value to our clients and consumers for years to come," continued Saunders. "The global adoption of mobile and internet technology presents an enormous opportunity for Visa to leverage our network and proven track record of delivering electronic payments worldwide."
Fiscal Second Quarter 2011 Financial Highlights: - Payments volume growth, on a constant dollar basis, for the three months ended December 31, 2010, on which fiscal second quarter service revenue is recognized, was a positive 15% over the prior year at $897 billion.
- Payments volume growth, on a constant dollar basis, for the three months ended March 31, 2011, was a positive 13% over the prior year at $861 billion.
- Cross border volume growth, on a constant dollar basis, was a positive 13% for the three months ended March 31, 2011.
- Total processed transactions, which represent transactions processed by VisaNet, for the three months ended March 31, 2011, were 12 billion, a positive 13% increase over the prior year.
- For the fiscal second quarter 2011, service revenues were $1.1 billion, an increase of 24% 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 13% over the prior year to $823 million. International transaction revenues, which are driven by cross border payments volume, grew 14% over the prior year to $624 million. Other revenues, which include the Visa Europe licensing fee, were $156 million, a 10% decrease over the prior year. Client incentives, which are a contra revenue item, were $451 million and represents 17% of gross revenues.
- Total operating expenses on a GAAP basis were $862 million for the quarter, a 3% increase over the prior year.
- Cash, cash equivalents, restricted cash, and available-for-sale investment securities were $6.6 billion at March 31, 2011.
- Visa's GAAP effective tax rate was 36% for quarter ended March 31, 2011.
Notable Events:
- During the three months ended March 31, 2011, the Company effectively repurchased approximately 8.7 million class A shares on an as-converted basis, at an average price of $72.58 per share, for a total cost of $630 million. Of the $630 million, $400 million of class B shares were effectively repurchased through the March funding of the litigation escrow account previously established under the Company's retrospective responsibility plan, representing 5.4 million class A shares on an as-converted basis at an average price of $73.81 per share. The remaining $230 million in repurchases of class A common stock were executed in the open market, representing 3.3 million shares at an average price of $70.53per share. At March 31, 2011, the October 27, 2010 share repurchase program had remaining authorized funds of $64 million.
- As announced on April 25, 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 on June 7, 2011, to all holders of record of the Company's class A, class B and class C common stock as of May 20, 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 April 20, 2012, and is subject to further change at the discretion of the Board.
Financial Outlook: 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: 16% to 16.5% range*;
- Marketing expenses: Less than $900 million;
- Annual operating margin: About 60%;
- GAAP tax rate: 36.5% to 37% range;
- Annual diluted class A common stock earnings per share growth of greater than 20%;
- Capital expenditures: Between $250-$275 million; and
- Annual free cash flow in excess of $3 billion.
*This range may change based on future developments regarding pending federal debit regulations. Fiscal Second 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, visit www.corporate.visa.com. Forward Looking Statements: This press release contains forward--looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by the terms "expect," "will," "continue" and similar references to the future. Examples of such forward--looking statements include, but are not limited to, statements we make about gross and net revenue, incentive payments, expenses, operating margin, tax rate, earnings per share, capital expenditures, free cash flow and the growth of those items. By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are neither statements of historical fact nor guarantees of future performance and (iii) are subject to risks, uncertainties, assumptions and changes in circumstances that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from those forward-looking statements because of a variety of factors, including the following: - the impact of timing and new laws, regulations and marketplace barriers, particularly the Wall Street Reform and Consumer Protection Act, including those affecting:
- issuers' and retailers' choice among debit payment networks;
- debit interchange rates;
- the spread of regulation of debit payments to credit and other product categories;
- the spread of U.S. regulations to other countries;
- consumer privacy and data use and security; and
- designation as a systemically important payment system;
- developments in current or future disputes and our ability to absorb their impact, including: interchange; currency conversion; and tax;
- macroeconomic factors such as:
- global economic, political, health environmental and other conditions;
- cross border activity and currency exchange rates; and
- material changes in our clients' performance compared to our estimates;
- industry and systemic developments, such as:
- competitive pressure on client pricing and in the payments industry generally;
- bank and merchant consolidation and their increased focus on payment card costs;
- disintermediation from the payments value stream through government actions or bilateral agreements;
- adverse changes in our relationships and reputation;
- our clients' failure to fund settlement obligations we have guaranteed;
- disruption of our transaction processing systems or the inability to process transactions efficiently;
- rapid technological developments;
- account data breaches and increased fraudulent and other illegal activity involving our cards; and
- issues arising at Visa Europe, including failure to maintain interoperability between our systems;
- costs arising if Visa Europe were to exercise its right to require us to acquire all of its outstanding stock;
- loss of organizational effectiveness or key employees;
- failure to integrate successfully CyberSource, PlaySpan or other acquisitions;
- changes in accounting principles or treatment; and
the other factors discussed in our most recent Annual Report on Form 10--K and our most recent Quarterly Reports on Form 10--Q for the first and second quarters of our 2011 fiscal year on file with the U.S. Securities and Exchange Commission. You should not place undue reliance on such statements. Unless required to do so by law, we do not intend to update or revise any forward--looking statement, because of new information or future developments or otherwise.
Contacts: Investor Relations: Jack Carsky or Victoria Hyde-Dunn, 415-932-2213, ir@visa.com Media Relations: Will Valentine, 415-932-2564, globalmedia@visa.com |
