Visa (V - Free Visa Stock Report) , a Dow-30 component and operator of the world's largest electronic payments network, has reported fiscal 2014 first-quarter results (year ends September 30th). Revenues advanced 11% from the year-earlier period, to $3.16 billion, but came in slightly below our forecast of $3.21 billion. At the same time, the company earned $2.20 per share in the December period, a 14% gain over the prior-year figure and $0.03 above our call. Visa stock, which vastly outperformed the market in calendar 2013, traded modestly higher on the news.

In the latest period, total volumes came in at $1.84 trillion (up 10% year over year), payment volumes were $1.16 trillion (+11%), while cross-border volumes increased 12%. (All figures are on a constant-dollar basis.) As expected, international markets continued to lead the way, with total volumes up 14%, 16%, and 30%, respectively, in Asia Pacific, Latin America, and the segment comprised of Central Europe, the Middle East, and Africa. Although volumes were up a decent 8% in Visa's home market, the United States, these results illustrate the ongoing shift in the payment processor's business.

Visa is experiencing another meaningful transition, with debit card payments accounting for an increasing proportion of total transactions. In fact, during the fiscal first quarter, debit cards represented 55.4% of transactions, up from 55.0% in the fiscal 2013 comparable period and less than 50% in the not-so-distant past. However, although the debit card business now represents the lion's share of `swipes', it only accounts for 36.7% of dollar volumes. Consumers typically use their debit cards for smaller, day-to-day purchases (such as groceries, dry cleaning, or filling up at the gas pump), while utilizing their credit cards for big-ticket items (including televisions, vacations, or new electronics), which naturally skews the data.

Looking ahead, we expect Visa to continue reporting stellar results for the remainder of fiscal 2014, and beyond. Indeed, our respective top- and bottom-line estimates, at $13.2 billion and $8.90 per share, would represent advances of 12% and 17% from the comparable figures in the previous year. Perhaps most impressive, even while Visa's business continued to expand, its operations remained lean; the operating margin widened 260 basis points in the December period, from the year-earlier level, to 65.8%.

Our long-term outlook for the company, and the stock, is unchanged. Visa remains the worldwide leader in electronic payments processing, with a ubiquitous brand name, rock-solid finances (no debt on the balance sheet), and best-in-class management. The share price experienced a substantial run-up in the year just ended, but still holds above-average total return potential to the end of this decade. In addition, the company is top rated for Financial Strength (A++), and Visa earns good marks for Safety (2) and Earnings Predictability, making this an attractive selection for all types of investors.

About The Company: Visa Inc. is the world’s largest retail electronic payments network providing processing services and payment product platforms. This includes credit, debit, prepaid, and commercial payments, which are offered under the Visa, Visa Electron, Interlink, and PLUS brands. Visa/PLUS is one of the largest global ATM networks, offering cash access in local currency in more than 200 countries. Visa’s global network, VisaNet delivers value-added processing, including fraud and risk management.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.