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Summary

  • Visa, Inc. (V) is slated to report 2Q2014 earnings after the bell on Thursday, April 24th.
  • Adjusted Earnings Per Share (EPS): The current Street estimate is $2.18 with a range of $2.12 to $2.26. Consensus was $2.21 three months ago.
  • Revenues: Analysts expect an increase of 7.8% y/y to $3.19 bln (range $3.15 bln to $3.22 bln).

By Craig Bowles

Overview

Visa, Inc. (NYSE:V) is slated to report 2Q2014 earnings after the bell on Thursday, April 24th. The earnings release is expected at approximately 4:00 p.m. EST with a conference call to follow at 5:00 p.m. that is webcast through Visa Investor Relations . A member of the Dow Jones Industrial Average, Visa has significant market influence and the potential to impact the broader market gauges.

Outliers & Strategy

Key measures:

  • Adjusted Earnings Per Share: The current Street estimate is $2.18 with a range of $2.12 to $2.26. Consensus was $2.21 three months ago. (Source: Yahoo! Finance). A GAAP number will be the comparable value if no adjusted EPS.
  • Revenues: Analysts expect an increase of 7.8% y/y to $3.19 bln (range $3.15 bln to $3.22 bln).
  • In terms of guidance, the company guidance is to average EPS growth in the mid to high teens during 2014 and to grow revenues in the low double-digits.
  • Last week, American Express (NYSE:AXP) reported its 1Q 2014 earnings per share of $1.33 vs. expected $1.30. This compared to the year-ago quarter figure of $1.15 a share.
  • The majority of analysts (81%) rate Visa as a buy.
  • Insiders have sold 645,886 shares the last six months. The company approved a $5 bln buyback in October, up from the 1.5 bln a year earlier.
  • Visa is compared to other credit card and financial companies with quarterly results possibly impacting MasterCard (NYSE:MA), American Express , Discover Financial (NYSE:DFS) Citigroup (NYSE:C) and JP Morgan Chase (NYSE:JPM).
  • Visa shares have a 1-day average price change on earnings of 3.29%. Options imply a 3.08% move.

Recent News

  • 04/24: Russian President Putin said Visa Inc. and MasterCard Inc. will lose market share in Russia after they blocked some transactions because of U.S. sanctions on individuals and banks, according to a post on Bloomberg.com.
  • 04/24 New payments business models coming from the giants of tech like Google (NASDAQ:GOOG) (NASDAQ:GOOGL), Amazon.com (NASDAQ:AMZN) and eBay (NASDAQ:EBAY) with its PayPal business could soon spell a changing dynamics of the broader payments industry, according to a press release by TheMotleyFool.com.
  • 04/14: Robert W. Baird upgraded Visa to Outperform from Neutral citing a more attractive risk/reward following the recent pullback in shares. The firm has a $245 price target for the stock, according to a post by TheStreet.com.
  • 04/10: Visa Inc. created a new Vice Chairman role for risk and public policy.
  • 03/27: Wal-Mart Stores Inc. (NYSE:WMT) this week sued Visa Inc for $5 billion, accusing the credit and debit card network of excessively high card swipe fees, according to a post by Reuters.

Technical Review

Visa's steady uptrend since 2010 just had its biggest pullback but only briefly tested the 200-day moving average. Current trading at around $209 will encounter resistance at $225 and support at $195, so there's potential for a $15 move in either direction off earnings. (Chart courtesy of StockCharts.com)

Summary

Visa has beaten or matched estimates in each of the last four releases but with varied market reactions. Earnings probably need to come in above $2.21 to support the stock's uptrend. The whisper number is $2.20 but the company has beaten estimates by at least 4c in three of the last four quarters. Revenue growth guidance was reduced last year, so coming in above 3.200 bln would be a pleasant surprise.

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Source: Earnings Preview - Visa Q2 2014