Visa Inc (V) Second Quarter Earnings: What To Expect

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Visa Inc (NYSE:V) will post its second quarter 2014 earnings after market close on April 24th. The American multinational financial services company lagged behind China Union Pay as the world’s most popular debit card. Even so, Visa is seeing higher EPS and revenue in the wake of the increasing popularity of plastic money.

E-commerce segment a weak point

For the second quarter, analysts are expecting a rise of 14% in EPS and 8% surge in the revenue compared to the corresponding quarter of last year. Consensus estimates for Earnings per share are $2.19 and for revenue $3.19 billion.

Both Visa Inc (NYSE:V) and MasterCard reign over the plastic money market, but are being challenged by eBay in the online segment. eBay’s PayPal posted a surge of 25% in the total payment volume for the December Quarter.

Analysts are expecting more customers in the coming quarter with recuperation in the United States economy. The unemployment rate dropped from 7.9% at the beginning of 2013 to around 6.7%. Visa Inc (NYSE:V) will draw major benefits from a better United States economy, but the e-commerce market seems to be dicey.

Growth record to continue for Visa

Visa Inc (NYSE:V) is expected to continue its growth record, which it has maintained over the years. Revenue for the company surged at a compound annual growth rate of 20% in the past six years. In the first quarter, the company posted an increase of 9% in the net income and revenue surged 11%. But total nominal payments volume growth dropped from 9.6% in the September quarter to 8.2%. Currency instability in India, as well as a slowdown in the United States impacted the growth.

In the United States, volume growth rate was 8.3% for the December quarter, a drop from 10.3% from the previous quarter. Asia contributes 40% of the total payment done through Visa outside America. Nominal growth rate for December quarter was 7.9% in the region due to the strengthening of U.S. dollar against Asian currencies. Retail sales grew 38% compared to the previous year, same quarter in 2013 Holiday season, but customer traffic declined due to bad weather in November and December. Customers were more inclined towards online shopping and online sales increased 9.3% during the same period, which is why Visa suffered a drop in growth.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at

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