Visa Inc (NYSE:V) released its earnings report for the first three months of 2013 this afternoon, May 1, after the market closed. The firm revealed that it earned $1.92 in the first quarter of the year on revenue of $3 billion. On today’s market shares in Visa Inc (NYSE:V) trended down, closing at $166.02 per share.
Visa Inc (NYSE:V) Earnings:
In the run up to the release of this report, analysts following Visa Inc (NYSE:V) were looking for earnings per share of $1.81 per share on revenue totaling $2.9 billion. The company earned $1.60 per share in the first three months of 2012, on revenue of $2.6 billion. In the run up to the release of this report, whisper numbers indicated that Visa Inc (NYSE:V) would report earnings a cent or two higher than analysts were looking for.
Since the start of 2013, shares in Visa Inc (NYSE:V) have increased by close to 10 percent, lagging the S&P 500, but staying generally in line with gains made by the broader market. The firm’s shares have gained more than 35 percent in the last twelve months. Investors seem confident that Visa Inc (NYSE:V), a company that surprised analysts positively in the five quarters before today’s report, can outperform in 2013.
Visa Inc (NYSE:V) has been performing well based on two major trends, the increase of economic, and particularly consumer, activity in the United States, and the increase in the use of modern payment methods in emerging markets. Both it and its biggest rival Mastercard Inc (NYSE:MA) have been performing well for investors based on these trends.
Mastercard Inc (NYSE:MA) stock is up just under 10 percent so far in 2013. Because of the industry they operate in, and the expanding nature of that industry, Mastercard Inc (NYSE:MA) earnings are a strong indicator for Visa Inc (NYSE:V) performance. Mastercard Inc (NYSE:MA) released its earnings report this morning, and disappointed investors.
There are signs that consumer spending in the United States may be slowing, and that would hit Visa Inc (NYSE:V) hard. Though the company is active in other western countries, and is growing in emerging markets, no market offers the sheer volume of money borne by plastic that the Unite States does.
Increasing taxes and a global economy that could be headed for another shock are still depressing sentiment and spending. Visa Inc (NYSE:V) is very susceptible to exogenous factors, the company is looking up right now, but a change could depress the firm’s takings later in 2013.