Visa beats by $0.02, reports revs in-line; lowers rev guidance, EPS growth guidance :
- Reports Q2 (Mar) earnings of $0.68 per share, $0.02 better than the Capital IQ Consensus of $0.66; revenues rose 6.4% year/year to $3.63 bln vs the $3.6 bln Capital IQ Consensus.
- Updates following 2016 outlook metrics: Lowers rev growth guidance, EPS growth guidance
- Now sees annual net revenue growth of 7% to 8% range on a constant dollar basis, with an expectation of about 3 percentage points of negative foreign currency impact (prior guidance was for high single-digit to low double-digit range on a constant dollar basis).
- Now sees EPS growth of low double-digits on a constant dollar basis, with an expectation of about 4 percentage points of negative foreign currency impact. This now includes interest expense of about $390 million, or over 9 cents of earnings per share, which equates to almost 4 percentage points of reduced year-over-year growth. (Prior guidance was for EPS growth in low-end of the mid-teens range on a constant dollar basis, with an expectation of about four percentage points of negative foreign currency impact).
- Now sees client incentives as a percentage of gross revenues in high-end of the 17.5% to 18.5% range; and adjusted effective tax rate of about 30%.
- Visa reaffirms its financial outlook for the following metrics for fiscal full-year 2016: Annual operating margin: Mid 60s; and Annual free cash flow of about $7 billion.
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