Visa Posts Net Loss, but Results Beat Expectations
Visa delivered a net loss as it set aside money to cover litigation costs but the credit-card maker's results beat expectations.
Following the earnings release, Visa shares rose. Get the latest quote here.
The credit and debit-card company delivered third-quarter earnings excluding items of $1.56 per share, up from $1.26 per share in the year-earlier period.
Revenue was $2.57 billion, an increase from the $2.32 billion posted a year ago.
Visa attributed its third-quarter results to double-digit growth in service revenues, data-processing revenues and international-transaction revenues.
Analysts had expected the company to report earnings excluding items of $1.45 per share on revenue of $2.52 billion, according to Thomson Reuters.
However, Visa posted a net loss for the quarter as it had to set aside money to cover litigation costs. It reported a net loss of $1.8 billion, or $2.74 per Class A share, compared with a profit of $1.0 billion, or $1.43 per Class A share, a year earlier.
The net loss includes a $4.1 billion litigation provision that the company took related to the 'swipe fee' anti-trust case.
"We are pleased that we were able to come to a resolution in the merchant litigation which was acceptable to most parties while ensuring the long-term health of the U.S. payments industry," CEO Joseph Saunders said in a statement.
Despite the net loss, the company raised its full-year earnings forecast for the second time this year and authorized a new $1 billion share repurchase program.
Visa said earnings per share growth for fiscal 2012 should be in the "low twenties," compared with its previous forecast of a "high teens to low twenties" growth.
Thomson Reuters contributed to this report.
Correction:
An earlier version of this story said that net income for the quarter was $1.1 billion, when in fact, the company reported a net loss of $1.8 billion. The $1.1 billion figure was adjusted net income which excluded a litigation provision and related tax benefit.