Visa stock is up about 23% over the past 12 months and is just shy of its July 2021 all-time high of $252.67.
Visa Inc (NYSE:V) stock rose 1.35% in Tuesday’s regular session after the company released earnings results for the fourth quarter of fiscal 2023 on Tuesday. Shares rose to $234.65, trading between the 50-day and 200-day lines.
The payments giant’s earnings results passed late Tuesday night analyst predictions Transaction volumes have increased this quarter due to increased consumer spending due to lower inflation.
Visa’s net income for the quarter increased 19% year over year to $4.7 billion, or $2.27 per share. Net revenue was $8.6 billion, more than the $8.5 billion expected by analysts. The firm reported adjusted earnings growth of 21% to $2.33 per share and 10.6% revenue growth to $8.6 billion. Analysts surveyed by FactSet Estimate 16.6% adjusted earnings growth to $2.25 per share, 9.9% revenue growth to $8.56 billion.
Payments volumes also increased by 9% for the quarter, with cross-border volumes increasing by 16% on a sustained basis, while transactions processed increased by 10%. The payments firm’s data processing revenue rose 13% to $4.26 billion, while services revenue growth increased 12% to $3.88 billion.
“Throughout the year, we saw resilient consumer spending, continued improvement in cross-border travel spending compared to 2019, and continued growth in our new flow and value-added services businesses,” Ryan McInerney, CEO of Visa Inc., said in a statement. statement, “As we enter a new fiscal year, I am confident in our ability to deliver against a backdrop of geopolitical and economic uncertainty.”
While this marks Visa’s third consecutive quarter of best-ever earnings, the coming months may not be as easy for the card issuer. The Federal Reserve of the United States is expected to reduce the limit on debit card fees that banks charge retailers for transactions which may lead to a decline in credit card fees.
While this news doesn’t appear to have had a significant impact on the company’s Q4 2023 results, it has hurt Visa stock performance in October and is likely to cause problems in coming quarters.
Another issue is the potential for financial pressure on consumers due to inflation and longer interest rates. Credit card defaults have increased this year, with credit card debt in the US exceeding $1 trillion for the first time in the second quarter.
This could not only impact Visa’s stock performance, but also increase scrutiny from lawmakers who have previously hinted at limiting credit card interest rates.
Visa stock is up about 23% over the past 12 months and is just shy of its July 2021 all-time high of $252.67.
The company expects high single-digit to low double-digit net revenue growth in the 2024 fiscal year. Adjusted earnings are expected to decline approximately 5.5% due to acquisition-related costs. Visa also expects GAAP earnings growth to remain at a high level. It raised its quarterly dividend by nearly 16% to 62 cents a share and announced it was planning a multi-year, $25 billion stock buyback.
Mercy Mutanya is a tech enthusiast, digital marketer, author and IT Business Management student. She enjoys reading, writing, doing crossword puzzles, and watching her favorite TV series.
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