The third quarter of 2022 was the most successful for VISA in the last year and a half. On July 26th, 📅 the world-famous payment system published its quarterly earnings report 💰, which was much better than analysts’ forecasts.
Let’s take a look at the highlights of the company’s earnings report for the third quarter of 2022:
- Earnings per share (EPS): $1.98 ($1.75 forecasted)
- Revenue: $7.28 billion ($7.07 forecasted)
Earnings Beat on 19% Revenue Growth
“Against the backdrop of macroeconomic uncertainty, significant exchange rate headwinds and the suspension of our business in Russia, Visa had a very strong quarter, with net revenues up 19%, GAAP EPS up 36% and non-GAAP EPS up 33%,” CEO Alfred F. Kelly, Jr. commented 📌
Representatives of the company state that the previously chosen VISA business model contributes to sustainable growth of all key financial indicators. It should be noted that for the last four financial quarters, the company has shown better results than experts predicted.
One of the main reasons for VISA income 💳 and profit growth is the increase in the number of payment transactions using bank cards of this payment system. Most likely, the number of tourists from different parts of the world increased in the reporting quarter, which influenced the activity of payment cards. Commission on payment transactions of VISA cards is the main source of income, so it is not surprising that the lifting of restrictions of COVID-19 😷 in other countries had a positive effect not only on tourism, but also on the financial performance of VISA.
Also, the company’s board of directors declared a quarterly cash dividend of $0.375 per share of Class A common stock, payable on September 1, to all holders of record as of August 12th. It was another factor in the growing demand for the company’s shares.
What to Expect from VISA Shareholders
VISA Stocks Trading Chart, July 2022.
While the economic outlook is unclear, many companies remain confident in the ability to execute with discipline and expand a role at the center of money movement. Nevertheless, spring and summer are the most active period 📈 of travel and payment activity among the population. It is likely that in the last fiscal quarter of 2022, the results could be slightly worse. Quarantine restrictions due to the risk of a new wave of COVID-19 😷, which will limit the activity of users of VISA banking products, may have a negative impact on it.
Regardless, the company does have a resilient business model that has not suffered even after leaving the Russian market. This means that investors can expect the stock to grow in the future 🚀
Summary
- Visa reports Q3 earnings beat on 19% revenue growth.
- Revenue grew 19% year-over-year (or 21% on a constant-dollar basis) to $7.3 billion.
- EPS grew to $1.98 coming in better than the consensus estimate of $1.74.
- While the economic outlook is unclear, company’s remain confident in the ability to execute with discipline and expand a role at the center of money movement.
