Visa 3rd Qtr 2008 Earnings Beats The Street

Visa Inc. Reports Fiscal Third Quarter 2008 Earnings Results

- GAAP net income of $422 million for the quarter

- Adjusted net income of $457 million for the quarter

- GAAP diluted class A common earnings per share of $0.51 for the quarter

- Adjusted diluted class A common earnings per share of $0.59 for the quarter

- Payment volume grew 19% over the prior year to $652 billion

- Company raises long-term outlook for adjusted operating margins

SAN FRANCISCO, July 30 /PRNewswire-FirstCall/ -- Visa Inc. (NYSE: V) today announced financial results for the Company's fiscal third quarter ended June 30, 2008. GAAP net income for the quarter was $422 million, or $0.51 per diluted class A common share. GAAP diluted class A common shares outstanding were 776 million. On an adjusted basis (reflective of a normalized tax rate and excluding certain litigation, restructuring and purchase amortization), net income for the quarter was $457 million, or $0.59 per diluted class A common share. Adjusted diluted class A common shares outstanding were 779 million.
Net operating revenue in the fiscal third quarter 2008 was $1.6 billion, driven by strong contributions from service fees, data processing fees, and international transaction fees as payment volumes and processed transactions rose across all regions worldwide.

Fiscal Third Quarter 2008 Financial Highlights:
Visa Inc.'s operational performance highlights for the fiscal third quarter, as measured by March 31, 2008 statistical data, include:
-- Payments volume grew 19% over the prior year to $652 billion;
-- Total volume, inclusive of cash volume was $1.0 trillion, an increase of 22% over the prior year;
-- Total cards carrying the Visa brands rose 14% worldwide to 1.6 billion over the prior year; and
-- Total payment transactions increased by 15% over the prior year to 10.7 billion.

Total processed transactions, which are based on current fiscal third quarter results on Visa's processing system, were 9.5 billion, a 13% increase over the prior year.

Financial Outlook:
Visa Inc. raises its financial outlook for the following metric for FY 2008:
-- Annual adjusted operating margin in the mid 40%'s range.
Visa Inc. raises its financial outlook for the following metric for FY 2009 and 2010:
-- Annual adjusted operating margin in the mid-to-high 40%'s range.
Visa Inc. reaffirms its financial outlook for the following metrics through 2010:
-- Annual net revenue growth of 11% to 15%;
-- Annual adjusted diluted class A common earnings per share growth of 20% or greater; and
-- Annual free cash flow (cash flow from operations plus cash reimbursements from litigation escrow less capital spending) in excess of $1 billion.
This outlook reflects an assumed 41% percent GAAP tax rate for fiscal year 2008. The Company's intent is to reduce this rate to a level around 35-36% over the next five years.