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Stock_Analyzer · #2 04-27-2008, 03:16 PM

Earnings Preview: Visa to report 1st quarter as public co.
Friday April 25, 3:38 pm ET
Visa expected to report earnings for fiscal 2nd quarter, its 1st as publicly traded company

NEW YORK (AP) -- Visa Inc. reports fiscal second-quarter earnings on Monday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: In late March, the credit card processor owned by a consortium of banks went public in the largest ever initial public offering. Visa went public at a price of $44 per share -- above expectations -- raising nearly $18 billion.

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Visa is on track to continue to grow as credit and debit cards increasingly replace cash and checks. In 2007, Visa handled more than 44 billion transactions totaling more than $3.2 trillion.

BY THE NUMBERS: Analysts polled by Thomson Financial, on average, forecast earnings of 46 cents per share on revenue of $1.45 billion.

ANALYST TAKE: "With its dominant market share and strong product set, we expect Visa to continue to benefit from the ongoing worldwide shift from cash to plastic spending," Stifel Nicolaus & Co. analyst Chris Brendler wrote in a research note.

Visa's pricing structure and business volume enables it improve profitability dramatically while only minimally impacting customers, Brendler wrote in the note.

Brendler recently initiated coverage of Visa with a "Buy" rating and a price target of $77. Brendler anticipates earnings of $2 per share in 2008 and $2.75 in 2009.

WHAT'S AHEAD: Cowen & Co. analyst Moshe Katri recently began coverage of Visa with an "Outperform" rating and expects earnings per share to grow by 20 percent or more during the next two to three years.

"In our view, the company's growth prospects as well as its attractive business model stand out among its business service peers," Katri wrote in a research note. "Even in a slowing economy, we feel that Visa's prospects remain solid as about 41 percent of its calendar year 2007 payment volume was generated from nondiscretionary consumer spending."

STOCK PERFORMANCE: Shares of Visa went public on March 19. The quarter ended less than two weeks later. In that time, shares rose 42 percent from their initial price of $44. Shares have continued to climb through the first part of the company's fiscal third quarter.