Visa crushes profits; Mastercard on tap

Visa (V) topped fiscal fourth-quarter earnings Tuesday night, with rival payments giant MasterCard (MOTHER) posting third-quarter earnings early Thursday. But shares of Visa and Mastercard fell.


Jefferies analysts said in an Oct.22 note to clients that they expect dull results due to the Covid-19 delta spike in August and a slowdown in e-commerce.

“For Visa, we expect the bulk of data processing revenue in the most processed transactions, driven by a steady recovery in cross-border (activity),” wrote analyst Trevor Williams.

Visa earnings

Dear: FactSet analysts expected Visa earnings of $ 1.55 per share for the fiscal fourth quarter, 38% above the prior-year quarter. Full-year earnings per share were observed to increase 15% to $ 5.81.

Revenues for the quarter were seen to grow 28% year-over-year to $ 6.52 billion, to close the year at $ 24.06 billion, a 10% annual gain.

Results: Visa reported earnings of $ 1.62 per share, a 45% jump from the prior year quarter, on sales of $ 6.6 billion, an increase of 29%. EPS was $ 5.91 for the year, while revenue increased 10% to $ 24.1 billion.

“Our performance was driven by continued recovery in many global economies and further diversification of our revenues with new flows and value-added services,” said Alfred Kelly, CEO of Visa. “Going forward, Visa is even better positioned for the future as cross-border travel recovers and we continue to drive the rapid growth of digital payments and enable innovation in the movement of money globally.”

Payment volume grew 17% in the quarter and 16% throughout 2021. Cross-border volume increased 38% in the fourth quarter and 9% for the year. Transactions processed increased 21% in the quarter and 17% in the full year.

In July, the giant Dow Jones ventured into the buy-now-pay-later domain, following the steps of PayPal (PYPL) and several others. The program is called Visa Installment Payment Solution. But unlike PayPal and other BNPL providers, which screen consumers to determine their creditworthiness, Visa will not conduct a risk assessment on the possibility of extending installment loans to credit card issuers.

Visa also dug her toe into NFT. In August, he bought a CyberPunk, a non-fungible token of a digital artwork, for about $ 150,000 worth of Ethereum.

Visa Actions

Shares of Visa fell nearly 4% in after-hours trading after initially rising.

The shares fell 0.9% to 231.83 on Tuesday. stock market trading. Visa shares are in a flat base with a point of purchase of 252.77, based on MarketSmith.

Visa relative force line has a downward trend. its RS classification is 50 out of a possible 99, while his EPS rating is 78. Both are below the 80 recommended by IBD.

Rival Mastercard Stock it fell 2% late after closing 1% at 357.05. Its relative force line is also falling, almost to record lows. Mastercard’s RS rating is only 37, while its EPS rating is 79.

Among other payment actions Square (SQ) was up 0.6% on Tuesday. Square is entering the BNPL market through a pending acquisition of AfterPay for $ 29 billion.

PayPal shares lost 1.6% on Tuesday, after saying they would not buy Pinterest (LEGS). PYPL shares fell 10% last week due to rumors of the PINS acquisition.

Mastercard earnings

Dear: Analysts are expecting Mastercard earnings per share of $ 2.19, up 37% from a year ago. Sales are forecast to amount to $ 4.95 billion, a 29% year-on-year increase.

Results: Come back on Thursday.

Last month, Mastercard announced that it also launch a BNPL program in the United States, called Mastercard Installments, it is scheduled to roll out to other markets in the future.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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