Visa Inc. today announced financial results for the Company's fiscal third quarter 2013 ended June 30, 2013. Net income for the quarter was $1.2 billion or $1.88 per share, an increase of 16% and 20%, respectively, over the prior year adjusted results.
The prior year results were adjusted to exclude a litigation provision of $4.1 billion and related tax benefits associated with the Multidistrict Litigation proceedings taken in the fiscal third quarter of 2012.
All references to earnings per share assume fully-diluted class A share count unless otherwise noted. The Company’s adjusted quarterly net income per share of class A common stock is a non-GAAP financial measure that is reconciled to its most directly comparable GAAP measure in the accompanying financial tables.
Net operating revenue in the fiscal third quarter of 2013 was $3.0 billion, an increase of 17% over the prior year, driven by strong growth in service revenues, data processing revenues and international transaction revenues.
“Visa delivered solid financial performance during our fiscal third quarter and we remain confident in delivering our guidance for fiscal year 2013,” said Charlie Scharf, Chief Executive Officer of Visa Inc. “We remain committed and focused on our long-term strategic goal of supporting our issuers, acquirers, merchants and government partners through flexibility and innovation in electronic payments. We are accelerating opportunities to expand our network through mobile, eCommerce and data-driven solutions, while continuing to deliver value to our shareholders.”
Fiscal Third Quarter 2013 Financial Highlights:
Payments volume growth, on a constant dollar basis, for the three months ended March 31, 2013, on which fiscal third quarter service revenue is recognized, was 9% over the prior year at $1.0 trillion.
Payments volume growth, on a constant dollar basis, for the three months ended June 30, 2013, was 13% over the prior year at $1.1 trillion.
Cross-border volume growth, on a constant dollar basis, was 11% for the three months ended June 30, 2013.
Total processed transactions, which represent transactions processed by Viocessed by Vi represent transactions processed by VisaNet, for the three months ended June 30, 2013, were 15.0 billion, a 14% increase over the prior year.
Fiscal third quarter 2013 service revenues were $1.3 billion, an increase of 7% 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 15% over the prior year to $1.2 billion. International transaction revenues, which are driven by cross-border activity, grew 14% over the prior year to $854 million. Other revenues, which include the Visa Europe licensing fee, were $179 million, a 1% increase over the prior year. Client incentives, which are a contra revenue item, were $521 million and represent 15% of gross revenues.
Total operating expenses were $1.2 billion for the quarter, a 9% increase over the prior year adjusted results, mainly due to personnel, network and processing fees, and depreciation and amortization associated with investments in technology projects to support our global growth initiatives.
The effective tax rate was 33.2% for the quarter ended June 30, 2013.
Cash, cash equivalents, and available-for-sale investment securities were $6.5 billion at June 30, 2013.
The weighted-average number of diluted class A common stock outstanding was 651 million for the quarter ended June 30, 2013.
During the three months ended June 30, 2013, the Company repurchased 6 million shares of class A common stock, at an average price of $176.75 per share, using $981 million of cash on hand. At June 30, 2013, the Company had $61 million of remaining funds, authorized by the Board of Directors, available for share repurchase under the current program. In addition, the Board of Directors has authorized a new $1.5 billion class A share repurchase program. The authorization will be in place through July 2014, and is subject to further changes at the discretion of the Board.
As announced on July 16, 2013, the Board of Directors declared a quarterly dividend in the aggregate amount of $0.33 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 September 4, 2013, to all holders of record of the Company’s class A, class B and class C common stock as of August 16, 2013.
Visa Inc. updates its financial outlook for the following metrics for fiscal 2013:
- Annual net revenue growth: Around 13%; and
- Adjusted annual diluted class A common stock earnings per share growth: Low twenties.
Visa Inc. affirms its financial outlook for the following metrics for fiscal 2013:
- Client incentives as a percent of gross revenues: 16% to 17% range;
- Marketing expenses: Under $1 billion;
- Annual operating margin: About 60%;
- Tax rate: 30% to 32% range;
- Capital expenditures: $425 million to $475 million range; and
- Annual free cash flow: About $6 billion.
Visa Inc. affirms its financial outlook for the following metrics for fiscal 2014:
- Annual net revenue growth: Low double digits;
- Adjusted annual diluted class A common stock earnings per share growth: Mid to high teens; and
- Annual free cash flow: About $5 billion.