Earnings Preview: Visa to report results after MasterCard beat expectations

theflyonthewall.com

Visa (V) is expected to report Q1 earnings after the market close on Wednesday, February 6 with a conference call scheduled for 5 pm ET on February 6. Visa is a credit card network... EXPECTATIONS: Analysts are looking for EPS of $1.79 on revenue of $2.82B. The consensus range is $1.73-$1.85 for EPS, and $2.74B-$2.87B for revenue, according to First Call... LAST QUARTER: Visa reported Q4 EPS of $1.54 against estimates for $1.50 on revenue of $2.73B against estimates for $2.68B. The company also predicted that its net revenue growth for the current fiscal year would be in the low double digits, and provided adjusted annual operating margin of about 60% for the current fiscal year. During the quarter the company removed an overhang by obtaining final approval for a settlement over merchants' swipe fee lawsuit against it. Under the deal Visa will lose about $4.4B, the company stated... STREET RESEARCH AND NEWS: Visa competitor and peer MasterCard (MA) on January 31 reported slightly stronger than expected Q4 results, and the company announced on February 5 that it would double its dividend to 60c from 30c Analysts have had mixed assessments of Visa in recent weeks. Wells Fargo on February 5 predicted that the company would report stronger than expected Q1 results, driven by a 10% increase in credit revenue and 8% growth in international transactions. The firm, however, also predicted that the credit card network's operating margin would fall slightly due to a 15% increase in operating expenses. Wells maintained an Outperform rating on the shares. Sterne Agee on February 4 said that it expected Visa to report "largely in-line" results, although it believes the company could beat the consensus outlook. The firm expects the company's conference call to be upbeat, and maintained a $175 price target and Buy rating on the shares. In an upbeat note Goldman Sachs on January 8 upgraded Visa to Conviction Buy from Buy, citing the company's leading position in payments, increased confidence in long-term transaction volume, and strong capital allocation prospects. The firm increased its price target on the shares to $188 from $160... PRICE ACTION: Visa has outperformed the market in the last three months, rising 11%.

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