Visa Inc.
Shares of Visa Inc. (V, Financial) traded slightly higher by 0.4% to the last price of $176.80 in after-hours trading on Thursday following the release of fourth-quarter results for fiscal 2019. Results for the quarter ended Sept. 30 were issued by Visa after the closing bell of the regular market.
The US-based promoter of electronic funds transfers worldwide posted a GAAP earnings per share of $1.34, up 9% from the year-ago quarter but missing analysts’ expectations by 9 cents on $6.14 billion in revenue (which grew 13.1% year over year). The top line exceeded the average projection by $60 million.
The following key business drivers allowed Visa to report the revenue growth: an increase in payments volume by 9% on constant currency, a rise in cross-border volume by 7% on constant currency and an 11% gain in processed transactions to 36.4 billion.
By segment, service revenues jumped 9% to $2.536 billion and data processing revenues rose 16% to $2.769 billion. International transaction revenues went up 11% to $2.18 billion and other revenues increased 35% to $345 million.
Client incentives were $1.693 billion, up 13% year over year, adding 21.6% to gross revenues. Client incentives were taken from fourth-quarter gross revenues to determine net revenues.
Visa also released financial figures for the full year of fiscal 2019. The most relevant update was $10.876 billion spending for the repurchase of its own common stock shares (about $8.61 billion) and the payment of quarterly dividends (about $2.27 billion).
Additionally, the board of directors authorized a 20% hike in the cash quarterly dividend to 30 cents per common share to be paid on Dec. 3 to shareholders who are of record as of Nov. 15.
For full fiscal 2020, the company expects annual net revenues growing in the low double-digits, client incentives being 22.5 – 23.5% of gross revenues and annual operating expense growing by mid-single-digits. Also, the effective tax rate is anticipated to range between 19% and 19.5%, and GAAP annual earnings per diluted share of class A common stock are expected to grow by mid-teens.
As of Sept. 30, the balance sheet had $13.28 billion in cash, restricted cash and short-term securities. It also had $16.73 billion in long-term debt, while total equity was worth $34.684 billion.
The share price has risen 34% to close at $176.2 at the end of regular trading on Thursday, Oct. 24. The market capitalization was around $394.67 billion.
Wall Street recommends buying shares of Visa. Its sell-side analysts have produced estimates on the price target averaging $202.12, which reflects 14.7% upside from Thursday’s closing share price.
Gilead Sciences Inc.Ă‚
Shares of Gilead Sciences Inc. (GILD, Financial) have fallen 1.7% to $64.88 in after-hours trading on Thursday after the US drug manufacturer missed forecasters' expectations on third-quarter GAAP earnings by 10 cents, having posted a loss of 92 cents per share.
The share price during extended trading was also impacted by a flat third-quarter revenue of $5.6 billion, compared to the prior-year quarter. The top line matched projections.
Key products’ total sales went up 1.1% to $5.52 billion. Sales of HIV treatment Genvoya dropped nearly 17.4% to $978 million. Sales of Truvada, which is also used to treat HIV infection, fell almost 5% to $721 million, and the complete regimen for HIV infection, Biktarvy, surged more than 225% to $1.256 billion.
Further, sales of Odefsey, which is an additional HIV treatment in the portfolio of Gilead, increased 3.1% to $436 million, and sales of Descovy, which is an HIV infection controller, went down 10.6% to $363 million.
For 2019, Gilead targeted product sales of $21.8 billion to $22.1 billion, the middle point of which is a marginal increase of the previous range of $21.6 billion to $22.1 billion. Also, the company forecasted product gross margin at 85-87% and effective tax rate at 20-21%, both unchanged from previous outlook.
Additionally, the drug producer declared a quarterly cash dividend of 63 cents per ordinary share. Gilead will pay the dividend on Dec. 30 to shareholders who are of record as of Dec. 13. The ex-dividend date is scheduled for Dec. 12.
The share price has increased 6% so far this year to $66 at close on Thursday for a market capitalization of approximately $83.59 billion.
Analysts issued an overweight recommendation rating for shares of Gilead Sciences with an average target price of $79.39, reflecting a rise of more than 20% from Thursday’s closing price.
Disclosure: I have no positions in any security mentioned.
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