What to Expect From Visa’s Q3 Earnings



Visa’s earnings

On July 23, Visa (V) is scheduled to report its third-quarter earnings for the quarter ending June 30. Analysts expect the company’s third-quarter revenues to be $5,699 million. The expectations are roughly 9% higher than the company’s revenues in the third quarter of 2018. Growth in transactions and payments volumes continued to drive Visa’s revenue growth. Notably, the company beat its revenue estimates in seven of the last eight quarters.

Visa’s estimated third-quarter EPS is $1.32—10% growth year-over-year. However, the estimated EPS represents around 1% sequential growth. So, Visa beat the EPS estimates in all of the last eight quarters.

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Recent key developments

Visa continued to expand, innovate, and launch new offerings in the third quarter. Key initiatives included the Verifi, Rambus Payments Portfolio, and Earthport acquisitions. The Verifi acquisition expanded Visa’s chargeback capabilities. The expansion will provide greater transparency and speed to resolve disputes between buyers and sellers.

Visa acquired Rambus’s token services and ticketing businesses. The acquisition extends tokenization’s security benefits beyond Visa cards to any transaction. In comparison, the Earthport acquisition enables individuals and companies to use Visa to send or receive money globally through bank accounts instead of just through Visa cards.

In June, Visa introduced installment payment capabilities to Visa cardholders. The program allows issuers and merchants to offer an installment payment option through buyers’ Visa cards. The solutions aim to simplify the installment process for buyers and sellers. Globally, installments represented $1.2 trillion in payment volume in 2017. Overall, installment payments have been growing much faster compared to credit card growth.

In June, Visa launched a B2B payments network. The network enables financial institutions to process high-value corporate cross-border payments quickly. The above initiatives enhance Visa’s position as a secure, convenient, fast, and reliable payments processor.

Analysts’ recommendations 

Among the 39 Reuters-surveyed analysts covering Visa, 13 recommended a “strong-buy,” while 22 recommended a “buy” and four recommended a “hold” before its third-quarter earnings. Visa’s mean target price is $184.


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