Visa reported good financial prospects
Last week, the issuer of plastic cards Visa Inc. (V) published a report for the second quarter of fiscal year 2022. The company increased revenue, but a good forecast was more unexpected for investors, despite the geopolitical uncertainty. In the last quarter ended March 31, Visa’s revenue grew by 25% year-on-year to $7.2 billion. GAAP profit increased by 21% to $3.6 billion.
Earnings per share rose 27% to $1.7. The volume of payments in the Visa ecosystem increased by 17%, and cross—border payments – by 38%. In the consumer payments segment, Visa’s revenue grew by over 20%. The stock of cash and equivalents amounted to $15.8 billion. The outbreak of the omicron strain affected Visa’s business slightly.
According to Visa management, geopolitical factors will reduce revenue by about 4% in the second half of 2022, but they cannot stop the positive dynamics associated with the transition to new payment technologies. Additional growth factors for the Visa are the recovery of the tourism industry. According to the results of the current quarter, Visa expects revenue growth above 15%. They expect similar dynamics in the fourth quarter.
The pandemic and other factors have not stopped the development of the cross-border payments segment, and globalization remains the key driver in the financial industry. Visa is expanding its portfolio of solutions in promising areas. So, in March, Visa gained the open banking platform Tink, which allows financial institutions, retailers, Fintech and other clients to quickly new financial services and tools for transactions. Investors took the report positively. First, it concerned the forecast, which dispelled fears about a sharp drop in Visa’s income after leaving a large market.
As a result, the quotes of V shares received an impulse of over 6% following the publication of the report. At the auction on April 28, the V stock was worth $220.66. Since the beginning of the year, the quotes have increased by 1.82%. The market capitalization was $484.07 billion.
