Visa Inc had an $861 million loss this year, mostly out of $2.65 billion litigation costs from settling an antitrust suit brought by American Express Co. Legal expenses reversed gains for the San Francisco-based company.
Revenue in the fiscal year ended September 30, 2007 rose 33 per cent to $5.19 billion, Visa said on Saturday, in a regulatory filing. The loss compares with profit of $453 million in 2006, it added.
The company had a $1.1 billion operating loss, while operating revenue rose 33 per cent to $5.2 billion. The loss included nearly $3 billion in reserve for outstanding litigation.
Rival cards
Visa’s November 7 settlement with American Express, cleared the way for its planned initial public offering (IPO) next year. The company wants to capitalise on consumers’ growing preference for credit and debit cards over cash and checks.
American Express sued Visa in November 2004 after the US Supreme Court ruled Visa and MasterCard violated antitrust laws by preventing member banks from offering rival cards. Citigroup and Bank of America, the two biggest US banks, later agreed to offer American Express services.
Visa booked a $1.9 billion charge for the settlement, and a $650 million provision for a suit from Discover Financial Services, the fourth-largest network, the company said on Saturday.
