SAN FRANCISCO – Cards giant Visa Inc. reported a $1.8 billion loss for its fiscal third quarter this afternoon, because of expenses related to its historic antitrust settlement with merchants.
On a GAAP basis, Visa reported a net loss of $1.8 billion, inclusive of a litigation provision of $4.1 billion, which will be paid from a litigation escrow account created by the conversion of its Class B shares owned by credit unions and banks. On July 24, 2012, the Company deposited $150 million into the litigation escrow account after converting credit union and banks shares.
The Company recorded a $4.1 billion pre-tax provision, or $2.9 billion on an after-tax basis, in the fiscal third quarter of 2012. This represents the Company's financial portion in the settlement of the antitrust case.
Excluding the litigation provision of $4.1 billion and related tax benefit, adjusted net income for the quarter was $1.1 billion, or $1.56 per diluted class A common share, an increase of 25% over the prior year on an adjusted basis, as revenues rose by 10% to $2.6 billion for the quarter.
For the first three quarters of the year Visa reported a 13% rise in revenues to $7.7 billion, and a decline in net income of 83% to $482 million due to the antitrust deal.