Upcoming AWS Coverage on Nelnet Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 16, 2017 / Active Wall St. announces its post-earnings coverage on Visa Inc. (NYSE: V). The Company announced its first quarter fiscal 2017 financial results on February 02, 2017. The world's largest payments network operator comfortable exceeded top- and bottom-line market expectations. Register with us now for your free membership at:

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One of Visa's competitors within the Credit Services space, Nelnet, Inc. (NYSE: NNI), announced on January 12, 2017, that it will release earnings for Q4 and year ended December 31, 2016, after the close of the NYSE on Monday, February 27, 2017. AWS will be initiating a research report on Nelnet in the coming days.

Today, AWS is promoting its earnings coverage on V; touching on NNI. Get our free coverage by signing up to:

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Earnings Reviewed

For Visa's Q1 FY17 ended December 31, 2016, net operating revenue surged 25% to $4.46 billion from $3.57 billion in Q1 FY16, driven by the inclusion of Europe and continued growth in processed transactions and nominal payments volume. Exchange rate shifts versus the prior year's negatively impacted reported net operating revenue growth by approximately 3 percentage points. The Company's revenue exceeded analysts' consensus estimates of $4.29 billion.

Visa's GAAP net income for Q1 FY17 was $2.07 billion, or $0.86 per share, both increasing 7% each, over the prior year's results. The Company stated that earnings per share growth were negatively impacted by approximately 3% due to exchange rate shifts compared to the prior year. Excluding $255 million non-cash, non-operating income item recorded upon the re-measurement of the Visa Europe put option in Q1 FY16, net income and earnings per share for the reported quarter increased 23% and 23%, respectively. The Company's earnings numbers handily surpassed Wall Street's forecasts of $0.78 per share.

Q1 FY17 Financial Highlights

For Q1 FY17, Visa's Payments volume growth, on a constant currency basis increased 39% on a y-o-y basis to $1.8 trillion. The Company stated that effective with the three months ended December 31, 2016, Europe co-badge volume is no longer included in reported volume. Visa noted that effective June 09, 2016, Article 8 of the EU Interchange Fee Regulation states that payment networks cannot impose reporting requirements or the obligation to pay fees on payment transaction where their payment brand is present but their network is not used. Prior to this regulation, Visa collected a small service fee in a few countries, particularly France, on domestic payment transactions where Visa cards are co-badged with the domestic network.

Visa reported that US payments volumes grew 12.4% in Q1 FY17, as credit grew 20.2%, helped by Costco and USAA. US debit grew 4.6%, helped by USAA debit conversion, but hurt by Interlink volumes. Excluding Interlink volumes, the US debit growth rate stepped up by 3 points, due to USAA and rising gas prices.

During Q1 FY17, Visa's international payment volumes grew 70.5% in constant dollars. The step-down in the growth rate from the last quarter is the result of the exclusion of co-badge volumes in Europe.

Total processed transactions, which represent transactions processed by Visa for Q1 FY17 were 27.33 billion, a 44% increase over the prior year. Total processed transactions growth, when normalized for Europe, was 13% over the prior year. US process transactions grew 11% due to Costco and USAA. The Company noted that de-monetization in India drove the increase in international process transaction growth. European process transactions were stable.

Q1 FY17, Visa's service revenues were $1.92 billion, up 17% on a y-o-y basis. Service revenue growth was helped by the announced price increase on US-acquired debit card service fees, offset by negative currency translation impact. Data processing revenues rose 28% over the prior year to $1.89 billion in the reported quarter. Visa's International transaction revenues grew 44% over the prior year to $1.49 billion in Q1 FY17, driven by cross-border volume acceleration, higher than average currency volatility, but offset by an unfavorable exchange rate impact Other revenues were $203 million in the reported quarter, up 2% on a y-o-y basis. For Q1 FY17, Client incentives, which are a contra revenue item, were $1.0 billion and represent 18.9% of gross revenues.

Cross-border volume growth, on a constant dollar basis, was 140% for the three months ended December 31, 2016. Cross-border volume growth, on a constant dollar basis when normalized for Europe, was 12% over the prior year.

Cash, cash equivalents, and available-for-sale investment securities were $13.2 billion at December 31, 2016.

Notable Events

In December 2016, Visa issued $567 million of commercial paper with a weighted-average interest rate of 0.79% and remaining maturities from 37 days to 66 days.

During Q1 FY17, Visa repurchased 22.3 million shares of class A common stock, at an average price of $79.77 per share, using $1.8 billion of cash on hand. At December 31, 2016, the Company had $3.9 billion of remaining funds, authorized by the board of directors, available for share repurchase under the current programs.

On January 31, 2017, Visa's board of directors declared a quarterly cash dividend of $0.165 per share of class A common stock payable on March 07, 2017, to all holders of record of the Company's common and preferred stock as of February 17, 2017.

Outlook

For FY17, Visa is forecasting Client's incentives as a percent of gross revenues to be in the 20.5% to 21.5% range. The Company is expecting annual net revenue growth in the 16% to 18% range on a nominal dollar basis, including 2.0% to 2.5% of negative foreign currency impact, and annual diluted Class A common stock earnings per share growth in low 30s on a GAAP nominal dollar basis and mid-teens on an adjusted, non-GAAP nominal dollar basis, including 2.5% to 3.0% of negative foreign currency impact.

Stock Performance

At the close of trading session on Wednesday, February 15, 2017, Visa's stock price was slightly up 0.79% to end the day at $87.54. A total volume of 8.03 million shares were exchanged during the session. The Company's share price has surged 22.22% in the past twelve months and 12.20% on YTD basis. The Company's shares are trading at a PE ratio of 41.41 and have a dividend yield of 0.75%. Moreover, the stock currently has a market cap of $202.40 billion.

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SOURCE: Active Wall Street