SAN FRANCISCO (dpa-AFX) - Visa Inc. (V), the world's largest payment card processing network, said Wednesday after the markets closed its fourth quarter profit rose 14% from last year, as it continues to benefit from the e-cash trend spreading worldwide. The company's quarterly earnings per share came in above analysts' expectations, but its quarterly revenue fell shy of analysts' forecast.
The San Francisco, California-based company reported net income for the fourth quarter of $880 million or $1.27 per class A share, compared to $774 million or $1.06 per class A share for the year-ago quarter.
On average, 29 analysts polled by Thomson Reuters expected the company to earn $1.25 per class A share for the fourth quarter. Analysts' estimates typically exclude special items.
Total operating revenues for the fourth quarter rose 13% to $2.38 billion from $2.12 billion in the same quarter last year, driven by strong contributions across all revenue categories. Twenty-six analysts had a consensus revenue estimate of $2.39 billion for the fourth quarter.
Fourth quarter service revenues, which are recognized based on payments volume in the prior quarter, increased 21% year-over-year to $1.1 billion.
Data processing revenues for the fourth quarter rose 10% to $925 million. International transaction revenues, which are driven by cross border payments volume, grew 23% to $758 million.
Client incentives, which are a contra revenue item, were $576 million for the quarter, and represents 19.5% of gross revenues.
On a constant dollar basis, payments volume growth for the third quarter, on which fiscal fourth quarter service revenue is recognized, was a positive 14% at $941 billion.
Payments volume growth, on a constant dollar basis, for the fourth quarter was a positive 13% at $970 billion.
Visa said it processed 13 billion transactions during the fourth quarter, an increase of 9% from last year.
'Visa continues to deliver strong results, with fourth quarter and full year performance reflecting a business that is both resilient and flexible enough to adapt and flourish in a changing business environment,' said Joseph Saunders, Visa Chairman and Chief Executive Officer..
During the fourth quarter, Visa repurchased about 5.2 million class A common shares for a total cost of $423 million.
The company said Wednesday that its Board of Directors has authorized a $1 billion increase to its previously announced $1 billion share repurchase program. The authorization will be in place through July 20, 2012, and is subject to further change at the discretion of the Board.
Looking forward, Visa affirmed its financial outlook through 2012 with annual net revenue growth in the high single to low double digit range and adjusted annual earnings per class A share growth in the mid to high teens range.
Visa shares, which have traded in a range of $66.50 to $94.75 over the past year, closed Wednesday's regular trading session at $92.02, up $1.34 or $1.48%. The stock is currently losing $2.07 or 2.25% in after hours trading.
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