Visa Profit Falls 3%

(RTTNews) - Visa Inc. (V), the world's largest payment card processor, said Thursday after the markets closed that its second quarter profit fell 3% from last year, when results were boosted by a $201 million tax benefit.

However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations as did its quarterly revenue.

"Visa reported another solid quarter of financial results against the continued backdrop of a tepid global economy. While the negative impacts from the strengthening of the U.S. dollar and lower gasoline prices continued to exert pressure on revenue growth, our results and volume trends have remained strong," said Charlie Scharf, Chief Executive Officer of Visa.

The company reaffirmed its fiscal full year 2015 outlook for constant dollar revenue growth of low double digits, with an expectation of two percentage points of negative foreign currency impact. However, the company said it now expects fiscal full year 2015 earnings per share growth at the low-end of the previously guided mid-teens range.

Visa shares are currently losing 1.23% in after hours trading after closing the day's regular trading session at $66.05, down $1.29 or 1.92%. The shares trade in a 52-week range of $48.80 to $69.98.

For the second quarter ended March 31, 2015, the Foster City, California-based company reported net income of $1.55 billion or $0.63 class A share, compared to $1.60 billion or $0.63 per class A share for the year-ago quarter.

On average, 33 analysts polled by Thomson Reuters expected the company to earn $0.62 per share for the second quarter.

Net operating revenue for the second quarter rose 8% to $3.41 billion from $3.16 billion in the same quarter last year. Thirty analysts had a consensus revenue estimate of $3.34 billion for the second quarter.

Visa processed 17 billion transactions during the second quarter, up 11% from a year earlier.

Payments volume growth, on a constant dollar basis, for the three months ended March 31, 2015, was 11% over the prior year at $1.2 trillion.

Second quarter service revenues, which are recognized based on payments volume in the prior quarter, increased 8% year-over-year to $1.6 billion.

During the second quarter, the company repurchased 16.2 million shares of its class A common stock for $1.1 billion. The company has $3.8 billion of remaining authorization available for share repurchase under the current program.

Last month, membership warehouses operator Costco Wholesale Corp. (COST) struck credit card partnerships with Citigroup Inc. (C) and Visa after it decided to end its exclusive U.S. partnership with American Express Co. (AXP) in March next year. Under the agreements, Citigroup, the world's largest issuer of consumer credit cards, will become the exclusive issuer of Costco's co-brand credit cards, and Visa will replace American Express as the credit card network for Costco in the U.S. and Puerto Rico beginning April 1, 2016.

Rival MasterCard, Inc. (MA) on Wednesday reported a 17% increase in first quarter profit that also beat analysts' estimate.