By Davit Kirakosyan
Visa (NYSE:V) shares gained 1.4% in pre-open trading Friday following its better-than-expected first-quarter results and relatively unchanged guidance after the close.
The payment processor posted earnings per share of $2.18, beating the consensus estimate of $2.01 and up 21% from last year.
Revenue grew 12% year-over-year, or 15% on a constant-dollar basis, to $7.9 billion, compared to the consensus estimate of $7.7B, as the company saw stable payments volume and processed transaction growth, and continued cross-border travel recovery.
Total processed transactions were 52.5B, up 10% year-over-year.
Service revenues grew 10% year-over-year to $3.5B, and Data processing revenues grew 6% year-over-year to $3.8B. International transaction revenues grew 29% year-over-year to $2.8B. Other revenues were $587 million, up 31% year-over-year.
The company also returned $4B of capital to shareholders in the form of share repurchases and dividends.
Visa continues to expect about 15% revenue growth for the year, ex-Russia. In addition, the company didn't change its expectations for roughly mid-teens cross-border growth.
Following the results, chairman and current CEO, Alfred Kelly, said, "I continue to see a bright future for Visa and believe that we have the right strategy to invest in and capitalize on the opportunities ahead across consumer payments, new flows, and value-added services."
On February 1, Ryan McInerney will become the new CEO of Visa and Kelly will assume the role of executive chairman.
Credit Suisse (SIX:CSGN) analysts raised the price target on Visa to $250 from $245 following the results, saying they continue to believe "Visa has very attractive qualities in the current environment." The analysts cited profitability, balanced exposure to discretionary versus non-discretionary and goods versus services, the ability to grow through moderate recessionary conditions, inflationary benefits, and mix shifts with cross-border evolving to become more eCommerce-focused and travel less-focused. The analysts maintained an Outperform rating on the stock.
Morgan Stanley analysts raised their price target to $288 from $284, reiterating an Overweight rating. They noted trends remain fairly stable with expense levers ready if the environment were to worsen. "We see new flows and value-added services providing support, with cross-border driving potential upside," the analysts added.