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Visa Inc. yesterday reported a net loss of $356 million for its fiscal fourth quarter ended Sept. 30. For the same quarter last year, before Visa went public, the network posted a pro forma net loss of $1.66 billion. Visa attributes this past quarter's loss to setting aside $1.1 billion in reserve for litigation expenses. To settle an antitrust dispute with Discover Financial Services, Visa earlier this week agreed to pay Discover $1.89 billion over four quarters in 2009, assuming Discover hits certain quarterly performance levels in its network sales volume (CardLine 10/28). Excluding litigation reserves and other one-time expenses, Visa posted a $448 million net gain for the quarter, more than double the $196 million pro forma net income it posted for the same period last year. For fiscal 2008, the company had net income of $804 million compared with a pro forma net loss of $861 million the previous fiscal year. Adjusted to exclude litigation and restructuring expenses for the year, Visa had fiscal 2007 net income was $1.75 billion, an increase of 67% from $1.05 billion the previous fiscal year. Fourth-quarter operating revenues were $1.71 billion, up 17% from $1.46 billion a year ago. For the year, operating revenues were $6.26 billion, up 21% from $5.19 billion in fiscal 2007. Fourth-quarter operating expenses totaled $2.15 billion, down 44% from $3.81 billion during the same period last year. Operating expenses for the year were $5.03 billion, down 20% from $6.31 billion in fiscal 2007. "Despite the current economic headwinds, international growth in credit and debit continues to offer us very attractive long-term opportunities as economies mature and payment systems evolve around the globe," Joseph Saunders, Visa chairman and CEO, told analysts during a conference call yesterday. "Working in our favor is our industry-leading debit presence here in the U.S. and still-positive growth rates in credit and cross-border volumes around the globe through September." That growth should enable Visa to meet the high end of its 11% to 15% revenue guidance for the first quarter of fiscal 2009, he said. But given worldwide economic uncertainty, Visa's target is the lower end of an 11% to 15% revenue projection for the full years of fiscal 2009 and 2010 "including the possibility of single-digit growth in our fiscal third and fourth quarters with low to flat cross-border volume growth," Saunders added.
