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Visa Inc. (V - Free Report) is set to report its fiscal fourth-quarter 2022 financial results on Oct 25, after the closing bell.

In the last reported quarter, the payments technology company’s adjusted earnings per share of $1.98 beat the Zacks Consensus Estimate by 13.8%, primarily due to continued growth in payments volume, cross-border volume, and processed transactions. However, elevated operating costs partly offset the upside.

Let’s see how things have shaped up prior to the fiscal fourth-quarter 2022 earnings announcement.

The Trend in Estimate Revision

The Zacks Consensus Estimate for fiscal fourth-quarter 2022 earnings per share of $1.86 has witnessed no upward revisions but three downward movements in the past week. The estimate is indicative of a 14.8% increase from the year-ago reported figure. Our estimate of $1.83 per share indicates 13% year-over-year growth. Visa beat earnings estimates in each of the trailing four quarters, delivering an average of 8.8%. This is depicted in the graph below.

Visa Inc. Price and EPS Surprise

Visa Inc. price-eps-surprise | Visa Inc. Quote

The Zacks Consensus Estimate for revenues is pegged at $7.6 billion, suggesting a 15.1% jump from the year-ago reported figure, while our estimate is $7.5 billion.

Factors to Note

Higher travel and entertainment-related spending are expected to have driven Visa’s results in the fiscal fourth quarter. The adaption of digital payments is expected to have continued in the quarter under review.

The Zacks Consensus Estimate for total volume, which consists of cash volume and payments volume (the primary lever of service revenues), is pegged at $3,676 billion, indicating an increase from $3,461 billion in the year-ago period. Our estimate indicates an 8.6% increase in the metric for the quarter under review.

As the company draws revenues as a set percentage of total transaction value every time a customer makes payments with a debit/credit card, higher spending means more revenues in the form of transaction processing fees. Both the consensus mark and our estimate for total payments transactions indicate a 10% year-over-year increase.

The consensus mark signals an 8.1% year-over-year increase in data processing revenues. We expect the metric to increase 6.8% year over year in the fiscal fourth quarter. With the growth in payments volume and processed transactions, Visa’s operating efficiency is expected to have improved in fourth-quarter fiscal 2022. This is expected to have positioned the company for year-over-year bottom-line growth.

However, rising expenses might have partially offset the positive impact of higher volumes, making an earnings beat uncertain. We expect total operating expenses for the quarter under review to increase 16.7% year over year due to increased Personnel, Network and Processing and Professional Fees expenses.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Visa this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.

Earnings ESP: The company has an Earnings ESP of -1.46%. The Most Accurate Estimate currently stands at $1.83 per share, lower than the Zacks Consensus Estimate of $1.86.

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