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Visa posts strong fiscal Q3 2012, authorises $1bn share repurchase programme.

Visa Inc.reported a net loss of $1.8 billion, inclusive of a litigation provision of $4.1 billion, related to the previously announced settlement agreement in the Multi-District Litigation case. Visa's share will be paid from a previously funded litigation escrow account established pursuant to the company's Retrospective Responsibility Plan.

Excluding the litigation provision of $4.1 billion and related tax benefit, adjusted net income for the quarter was $1.1 billion, or $1.56 per diluted class A common share, an increase of 25 per cent over the prior year on an adjusted basis. GAAP net operating revenue in the fiscal third quarter of 2012 was $2.6 billion, an increase of 10 per cent over the prior year and driven by strong double-digit growth in service revenues, data processing revenues and international transaction revenues.

Payments volume growth, on a constant dollar basis, for the three months ended 31 March 2012, on which fiscal third quarter service revenue is recognized, was a positive 11 per cent over the prior year at $958 billion. Payments volume growth, on a constant dollar basis, for the three months ended 30 June 2012, was a positive six per cent over the prior year at $979 billion.

Cross-border volume growth, on a constant dollar basis, was a positive 14 per cent for the three months ended 30 June 2012.Total processed transactions, which represent transactions processed by VisaNet, for the three months ended 30 June 2012, were 13.1 billion, a positive one per cent increase over the prior year.

During the quarter the company repurchased approximately 4.0 million class A common shares, at an average price of $115.51 per share, for a total cost of $461 million. The Board of Directors has authorised a new $1 billion class A share repurchase program. The authorisation will be in place through July 2013, and is subject to further change at the discretion of the Board.

As announced on July 13, 2012, the company, MasterCard and US financial institution defendants signed a memorandum of understanding to enter into a settlement agreement to resolve the Class Plaintiffs' claims in the Multi-District Litigation case, and announced an agreement in principle to settle with the individual plaintiffs whose claims were consolidated into the case for pre-trial purposes. The proposed settlement payments for both the Class and individual claims would be approximately $6.6 billion, of which Visa's share would represent approximately $4.4 billion. Visa's share will be paid from the litigation escrow account established pursuant to the company's Retrospective Responsibility Plan.

2012 CPI Financial. All rights reserved.

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Publication:CPI Financial
Article Type:Financial report
Date:Aug 2, 2012
Words:440
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