Visa Inc. (V), the world's largest payment card processing network, said Wednesday after the markets closed that its fourth quarter profit jumped 89% from last year, helped by higher revenue and a reversal of previously recorded tax reserves.
The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its quarterly revenue.
The company also said its Board of Directors has authorized a new $1.5 billion class A share repurchase program. The authorization will be in place through October 2013.
"Visa delivered strong financial performance for the fourth quarter and full year, a result of our focus on growing our core business, accelerating expansion of our business outside the U.S and investing in next-generation technologies that will define the future of payments," said Joseph Saunders, Chairman and Chief Executive Officer of Visa.
Charles Scharf, a former chief of JPMorgan Chase & Co.'s (JPM) retail financial services unit, will succeed Joseph Saunders as Visa CEO on November 1, the company said last week. Saunders will continue as Visa's executive chairman during the period of his employment that extends to March 31, 2013.
Rival MasterCard Inc. (MA) earlier Wednesday reported an 8% increase in third quarter profit, as growth in volumes and processed transactions boosted its revenue. The company's quarterly earnings per share topped analysts' expectations, while its quarterly revenues missed analysts' forecast.
Visa shares are currently gaining 1.17% in after hours trading after closing the day's regular trading session at $138.76, up 45 cents. The shares trade in a 52-week range of $88.78 to $143.10.
Visa's fourth quarter service revenues, which are recognized based on payments volume in the prior quarter, increased 14% year-over-year to $1.3 billion.
Data processing revenues for the quarter climbed 15% to $1.1 billion. International transaction revenues, which are driven by cross border payments volume, grew 5% to $796 million.
Client incentives, which are a contra revenue item, were $563 million for the quarter, and represented 17% of gross revenues.
On a constant dollar basis, payments volume for the third quarter, on which fiscal fourth quarter service revenue is recognized, grew 6% over the prior year at $978 billion.
Payments volume, on a constant dollar basis, for the fourth fiscal quarter grew 6% over the prior year to $1 trillion.
Visa said it processed 14 billion transactions during the fourth quarter, an increase of 2% from last year.
For the fourth quarter ended September 30, 2012, the San Francisco, California-based company reported net income for the fourth quarter of $1.7 billion or $2.47 class A share, compared to $880 million or $1.27 per class A share for the year-ago quarter.
Excluding a special item related to the reversal of previously recorded tax reserves which increased net income by $627 million, adjusted net income for the latest quarter was $1.0 billion or $1.54 per class A share.
On average, 33 analysts polled by Thomson Reuters expected the company to earn $1.50 per class A share for the fourth quarter. Analysts' estimates typically exclude special items.
Total operating revenues for the fourth quarter rose 15% to $2.73 billion from $2.38 billion in the same quarter last year. Thirty-one analysts had a consensus revenue estimate of $2.68 billion for the fourth quarter.
Looking forward to fiscal 2013, the company forecast net revenue growth in the low double digits and class A common stock earnings per share growth in high teens.
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