Tuesday 28 April 2015

Visa Inc. Earnings Preview For 2QFY15


Visa Inc. will be releasing its second quarter fiscal year 2015 earnings report on April 30. Analysts expect the company to post EPS of 62 cents on $3.34 billion of revenue.

Visa Inc. is scheduled to report its second quarter FY15 earnings result on Thursday April 30. The complete results together with all the financial information will be published after the bell rings on the company’s website under investor relation column.
The company is expected to beat the analyst’s expectation for the quarter, mainly because most of the banks have posted better than expected earnings. Another reason can be that they have provided lesser than prior year quarters losses provision. This indicates that the credit quality has gone better.
However, the company will not be concerned regarding credit quality. Visa Inc. issue cards through another bank rather than itself, which is responsible for credit quality and problems related to repayments.
During the quarter, JP Morgan said that it has observed almost 8% increases in issuance of credit card. This only specifies the credit quality and bank’s confidence to deal with the recovery process. Banks issued Visa Inc. cards and also Master cards. Hence, Visa might have also observed a transactional volume and charges growth in the first quarter of FY15.
During the previous conference call, Visa stated it was expecting the foreign exchange volatility and weakening gas prices to affect its financial results. So, it estimated its revenue to increase in single digit during the second quarter. Consumers usually pay their gas bills via credit card. So, falling price indicated lower bills, causing lower charges of transactions for the company, however it provides advantage to consumers.
 The company said that it is likely to grow its revenue in the next quarter and planning to reach double figure in the fourth quarter of FY15. Visa said that it paid 17.4% in incentives during the last quarter.
Analysts at Wall Street forecasted the company to report earnings of $0.62 per share and almost $3.34 billion of revenue for the quarter covering from January to March 2015. In the prior year quarter, the company made $0.63 in earnings per share and revenue of $3.16 billion. This suggests that analysts are projecting earnings per share to go down by 1.6%, in spite of forecasting a 5.6% revenue growth.
Visa stock is down by 0.56% and stood at $67.10 at market close on Monday April 27.

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