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S&P 500 (NYSE:SPY) component Visa (NYSE:V) will unveil its latest earnings tomorrow, Wednesday, July 25, 2012. Visa is a global payments technology company that connects consumers, businesses, banks and governments around the world.
Visa Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average analyst estimate is for profit of $1.45 per share, a rise of 15.1% from the company’s actual earnings for the year-ago quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. Analysts are projecting profit to rise by 21.4% versus last year to $6.06.
Past Earnings Performance: Last quarter, the company beat estimates by 10 cents, coming in at net income of $1.60 a share versus the estimate of profit of $1.50 a share. It marked the fourth straight quarter of beating estimates.
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A Look Back: In the second quarter, profit rose 46.7% to $1.29 billion ($1.34 a share) from $881 million ($1.23 a share) the year earlier, exceeding analyst expectations. Revenue rose 14.8% to $2.58 billion from $2.25 billion.
Wall St. Revenue Expectations: Analysts are projecting a rise of 8.6% in revenue from the year-earlier quarter to $2.52 billion.
Stock Price Performance: Between May 22, 2012 and July 23, 2012, the stock price had risen $8.25 (7.10%), from $116.22 to $124.47. The stock price saw one of its best stretches over the last year between June 13, 2012 and June 20, 2012, when shares rose for six straight days, increasing 6.7% (+$7.69) over that span. It saw one of its worst periods between July 5, 2012 and July 11, 2012 when shares fell for five straight days, dropping 4.9% (-$6.27) over that span.
The company enters this earnings announcement with substantial revenue momentum. The company has averaged year-over-year revenue growth of 13.9% over the last four quarters.
After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose 13.7% in the fourth quarter of the last fiscal year and 16.4% in the first quarter before increasing again in the second quarter.
Analyst Ratings: With 23 analysts rating the stock a buy, one rating it a sell and five rating the stock a hold, there are indications of a bullish stance by analysts.
Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.87 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company improved this liquidity measure from 2.82 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 3.2% to $10.29 billion while liabilities rose by 1.4% to $3.59 billion.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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