Visa (V) Up 0.2% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Visa reported strong second-quarter fiscal 2024 results, driven by expanding payments volume and resilient consumer spending despite economic challenges [2][3][10] Financial Performance - Earnings per share (EPS) reached $2.51, exceeding the Zacks Consensus Estimate of $2.43 by 3.3%, and rose 20% year over year [2] - Net revenues improved 10% year over year to $8.8 billion, beating the consensus mark by 2.1% [2] - Processed transactions grew 11% year over year to 55.5 billion, surpassing estimates [3] Business Drivers - Payments volume increased 8% year over year on a constant-dollar basis, with significant growth in Europe, CEMEA, and LAC regions [3] - Cross-border volume climbed 16% year over year on a constant-dollar basis, contributing to international transaction revenues [3] Operational Metrics - Service revenues grew 7% year over year to $4 billion, slightly missing estimates [4] - Data processing revenues rose 12% year over year to nearly $4.3 billion, meeting estimates [4] - International transaction revenues improved 9% year over year to almost $3 billion, but missed consensus estimates [4] Expenses and Incentives - Client incentives increased 12% year over year to $3.3 billion, accounting for 27.1% of gross revenues [5] - Operating expenses surged 29% year over year to $3.4 billion due to various cost increases [5] Balance Sheet - Cash and cash equivalents decreased to $13 billion from $16.3 billion at the fiscal 2023 year-end [6] - Total assets rose to $92.4 billion from $90.5 billion at the fiscal 2023 year-end [6] - Long-term debt slightly increased to $20.6 billion, while total equity grew to $40.5 billion [7] Cash Flow - Net cash from operations was $4.5 billion, up 17.6% year over year, with free cash flows at $4.3 billion, up 16.6% year over year [8] Capital Deployment - Visa returned $3.8 billion to shareholders through share buybacks and dividends, with $23.6 billion remaining under its repurchase program [9] Future Outlook - For fiscal 2024, Visa anticipates low double-digit growth in net revenues and operating expenses, with EPS expected to grow in the low teens [11] - Adjusted constant-dollar net revenues are projected to witness low double-digit growth in fiscal Q3 2024 [10] Industry Context - Visa operates within the Zacks Financial Transaction Services industry, where peers like Equifax have shown positive performance trends [14]