Visa posts strong fiscal first quarter 2011 earnings results

Visa Inc. today announced financial results for the Company's fiscal first quarter 2011 ended December 31, 2010. GAAP net income for the quarter was $884 million, or $1.23 per diluted class A common share. The weighted average number of diluted class A common shares outstanding was approximately 719 million.

GAAP net operating revenue in the fiscal first quarter of 2011 was $2.2 billion, an increase of 14% over the prior year and driven by strong double-digit growth in service revenues, data processing revenues and international transaction revenues. Currency fluctuations contributed a positive 1% towards quarterly net operating revenues.

"Visa's first quarter was a great start to our fiscal 2011 as evidenced by strong earnings fueled by continued growth in payments volume, cross border volume and processed transactions globally - our core business," said Joseph Saunders, Chairman and Chief Executive Officer of Visa Inc.

"Visa is in a strong position to continue to accelerate the migration to electronic payments, particularly in economies where cash and check remain predominant. We are intensely focused on growing Visa's revenue globally, working alongside our financial institution, merchant, technology and government partners. In parallel, we are aggressively investing to expand Visa payment services through new technology platforms, like mobile, eCommerce and money transfer, to extend the reach and value of our global network."

Fiscal First Quarter 2011 Financial Highlights:

Payments volume growth, on a constant dollar basis, for the three months ended September 30, 2010, on which fiscal first quarter service revenue is recognized, was a positive 14% over the prior year at $829 billion.

Payments volume growth, on a constant dollar basis, for the three months ended December 31, 2010, was a positive 15% over the prior year at $897 billion.

Cross border volume growth, on a constant dollar basis, was a positive 15% for the three months ended December 31, 2010.

Total processed transactions, which represent transactions processed by VisaNet, for the three months ended December 31, 2010, were 13 billion, a positive 15% increase over the prior year.

For the fiscal first quarter 2011, service revenues were $1.0 billion, an increase of 22% versus the prior year, and are recognized based on payments volume in the prior quarter. All other revenue categories are recognized based on current quarter activity. Data processing revenues rose 10% over the prior year to $844 million. International transaction revenues, which are principally driven by cross border payments volume, grew 14% over the prior year to $630 million. Client incentives, which are a contra revenue item, were $405 million and represents 15% of gross revenues.

Total operating expenses on a GAAP basis were $872 million for the quarter, a 17% increase over the prior year.