Visa Inc. (V) has reported a 6.65 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $2,070 million in the quarter, compared with $1,941 million for the same period last year.
Revenue during the quarter grew 25.13 percent to $4,461 million from $3,565 million in the previous year period. Total expenses were 30.51 percent of quarterly revenues, down from 32.79 percent for the same period last year. This has led to an improvement of 228 basis points in operating margin to 69.49 percent.
Operating income for the quarter was $3,100 million, compared with $2,396 million in the previous year period.
"Visa's fiscal 2017 is off to a terrific start with a strong first quarter of revenue and earnings growth driven by accelerating growth in payments volume, cross-border commerce and processed transactions in virtually all regions around the world," said Alfred F. Kelly, Jr., chief executive officer of Visa Inc. "As we look ahead, we continue to see good momentum in the business driven by domestic and cross-border volumes, increasing consumer participation in electronic payments in developing markets, and the further acceleration of e commerce in developed markets," added Kelly. "We remain focused on the integration of Europe which is proceeding well."
For the fiscal year 2017, Visa Inc. forecasts revenue to grow in the range of 16 percent to 18 percent.
Operating cash flow improves significantly
Visa Inc. has generated cash of $2,508 million from operating activities during the quarter, up 26.73 percent or $529 million, when compared with the last year period.
The company has spent $417 million cash to meet investing activities during the quarter as against cash outgo of $6,194 million in the last year period.
The company has spent $1,730 million cash to carry out financing activities during the quarter as against cash inflow of $13,534 million in the last year period.
Cash and cash equivalents stood at $5,824 million as on Dec. 31, 2016, down 54.63 percent or $7,013 million from $12,837 million on Dec. 31, 2015.
Working capital drops significantly
Visa Inc. has witnessed a decline in the working capital over the last year. It stood at $4,348 million as at Dec. 31, 2016, down 78.39 percent or $15,768 million from $20,116 million on Dec. 31, 2015. Current ratio was at 1.42 as on Dec. 31, 2016, down from 4.76 on Dec. 31, 2015.
Days sales outstanding went down to 52 days for the quarter compared with 64 days for the same period last year.
Debt moves up marginally
Visa Inc. has witnessed an increase in total debt over the last one year. It stood at $16,451 million as on Dec. 31, 2016, up 3.62 percent or $574 million from $15,877 million on Dec. 31, 2015. Short-term debt stood at $2,313 million as on Dec. 31, 2016. Total debt was 25.96 percent of total assets as on Dec. 31, 2016, compared with 28.88 percent on Dec. 31, 2015. Debt to equity ratio was at 0.52 as on Dec. 31, 2016, down from 0.54 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 22.14 for the quarter from 82.62 for the same period last year.
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