Visa’s results

Visa (V) reported its second-quarter earnings after the market closed on April 24. The second quarter of fiscal 2019 ended March 31. The company beat analysts’ EPS estimates for the quarter by 5.6%. Visa reported an EPS of $1.31 compared to the consensus estimates of $1.24. Visa’s EPS rose 17% YoY (year-over-year). Visa reported revenues of $5.5 billion, which were 8% higher than the second quarter of 2018. The company’s net income rose 14% YoY.

Visa Beat Earnings Estimates in Q2

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As the above graph shows, Visa beat its EPS estimates in all of the last nine quarters.

Growth drivers

Visa’s results for the quarter were driven by growth in its payments volumes and processed transactions during the quarter. The payments volumes grew 8% YoY, while the processed transactions volumes grew 11% YoY in constant dollars. The cross-border volume growth slowed down to 4% from 7% in the first quarter.

“The cross border slowdown is largely driven by sluggish outbound commerce from countries whose currencies have materially weakened on a year-over-year basis,” noted Vasant Prabhu, Visa’s CFO, on the earnings call. Argentina, Russia, Brazil, Australia, Canada, and the Eurozone saw their currencies decline against the US dollar.

Increased EPS outlook

Visa raised its EPS outlook for fiscal 2019 based on its performance in the first two quarters of the fiscal year. Visa expects nominal dollar GAAP EPS growth in the low twenties and adjusted non-GAAP nominal dollar growth in the high end of mid-teens for 2019. Visa forms 5.3% of the Technology Select Sector SPDR Fund (XLK).

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