Visa’s quarterly net income is projected to slow for this year and hover at the $1.5 billion mark in the fourth quarter and the first quarter of 2016. Forecaster RAM Research predicts Visa net income for the first quarter will be $1504 million, due to the continued strengthening of the U.S. dollar.
VISA NET INCOME PROJECTION
1Q/15: $1550 million
2Q/15: $1319 million
3Q/15: $1041 million
4Q/15: $1521 million
1Q/16: $1504 million
Source: RAM Research; CardData; Visa
Visa (VS) first quarter profits declined 3.0% year-on-year (YOY) or 0.5% on a currency adjusted basis (FX) to $1550 million. Global purchase volume rose 11% (FX) to $1.3 trillion and total transactions processed, by VisaNet, were 17.5 billion, an 11% increase over the prior year.
U.S. Gross Dollar Volume (GDV) for Q1/15 (credit + debit) increased 9.3% YOY to $747 billion, while Purchase Dollar Volume (PDV) rose 9.1% YOY to $627 billion.
The number of U.S. Purchase Transactions (PTX) for credit + debit jumped 9.3% to 12.2 billion for the first quarter.
At the end of Q4/14 Visa had 614 million U.S. accounts representing 783 million credit and debit cards. (Visa reports accounts and cards on a one quarter delay).
For U.S. Visa credit cards, PDV increased 12.2% for Q1/15 to $302 billion and the number of cards-in-force (CIF) rose 10.6% YOY for Q4/14 to 313 million.
For U.S. Visa debit cards, PDV rose 6.3% YOY for Q1/15 to $325 billion and the number of CIF increased 6.1% YOY for Q4/14 to 470 million.
VISA PROFITS HISTORICAL
Q1/14: $1598 million
Q2/14: $1360 million
Q3/14: $1073 million
Q4/14: $1569 million
Q1/15: $1550 million
Source: Visa; CardData
Visa noted net operating revenue in the first calendar quarter of 2015 was $3.4 billion, an increase of 8% nominally or 10% on a constant dollar basis over the prior year, driven by solid growth in service revenues, data processing and international transaction revenues. The strengthening of the U.S. dollar impacted net operating revenues by approximately 2.5 percentage points of negative growth during the quarter.
First quarter 2015 service revenues were $1.6 billion, an increase of 8% over the prior year, and are recognized based on payments volume in the prior quarter. All other revenue categories are recognized based on current quarter activity. Data processing revenues rose 9% over the prior year to $1.3 billion. International transaction revenues grew 11% over the prior year to $964 million. Other revenues, which include the Visa Europe licensing fee, were $204 million, an increase of 12% over the prior year. Client incentives, which are a contra revenue item, were $676 million and represent 16.5% of gross revenues.
For data, background and forecasts on Visa: Search CardWeb.com’s CardFlash® Library of more than 58,000 archived articles; Access CardWeb.com’s CardData® for current and historical Performance, Portfolios, Profiles, etc. Visit RAM Research® (ramresearch.com) for quarterly and annual forecasts covering more than 150 metrics. [complimentary or deeply discounted access to CardWeb.com subscribers].
Additional database resources include CardWeb.com’s CardExecs® – comings & goings of payments movers & shakers; CardWeb.com’s CardWatch® – ears & eyes on marketing globally (57K items); and CardWeb.com’s CardPixes® – form & function of card design (7K items).