Visa Inc V shares are up 1.8 percent on a weak market day Friday after the company reported encouraging earnings and revenue numbers in its fiscal third quarter. The company also maintained its aggressive capital return program, which gave back more than 100 percent of Visa’s total income to shareholders on the quarter.
Visa’s adjusted EPS of $0.86 and revenue of $4.6 billion both topped Wall Street's expectations for the quarter, and Visa reported $1.7 billion in buybacks and about $400 million in dividends, leaving $5.5 billion remaining in its share repurchase budget.
“Visa fired on all cylinders this quarter, as reflected through strong revenue growth and better-than-expected operating margin,” Credit Suisse analyst Serena Hong wrote Friday.
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Company management attributed the strong quarter to a combination of widespread payment volume growth, timing delays in resetting commercial terms for European clients and double-digit cross border growth.
Service revenue was up 19 percent year-over-year, data processing fees were up 29 percent and international revenue was up 45 percent.
One of the few disappointing items for investors on the quarter was higher-than-expected operating expenses of $1.5 billion, up 31 percent from a year ago.
Visa also raised its full-year revenue and earnings growth guidance to about 20 percent, up about 3 percent from its previous target.
Credit Suisse has upped its 2017 and 2018 EPS estimates from $3.39 and $3.90 to $3.45 and $4.00, respectively.
The firm maintains an Outperform rating for Visa but has raised its price target from $105 to $112.
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