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MasterCard Earnings Top Estimates As Card Transactions Grow


Credit and debit card payment processor MasterCard Inc. (MA) reported Wednesday a 21 percent increase in profit for the first quarter, as strong growth in volumes and processed transactions boosted its revenues. Both earnings per share and revenue topped analysts' estimates.

Ajay Banga, president and chief executive officer of MasterCard said, "We had a good start to the year with solid first quarter results driven by an increase in processed transactions, the highest quarterly growth rate since our IPO, as well as positive volume growth in all regions as consumers continue to adopt electronic payments."

MasterCard and its larger peer Visa Inc. (V) are benefiting from increased adoption of electronic payments by consumers across the globe.

MasterCard's worldwide purchase volume by cardholders during the quarter improved 17 percent on a local currency basis to $629 billion.

Purchase volume in the Asia Pacific/Middle East/Africa or APMEA region rose 24 percent on a local currency basis, while Latin America recorded 23 percent increase in purchase volume. Purchase volume in the U.S., its biggest market, rose 14 percent.

As of March 31, 2012, the company's customers had issued 1.8 billion MasterCard and Maestro-branded cards.

MasterCard noted that in the U.S., it has significantly improved its position in debit and now has the capability to process transactions on about half of all U.S. debit cards.

Outside of the U.S., the acquisitions of DataCash and Access Prepaid Worldwide were delivering growth, with both showing roughly 25 percent operational increases.

MasterCard's first-quarter net income was $682 million or $5.36 per share, up from $562 million or $4.29 per share in the year-ago period.

On average, 31 analysts polled by Thomson Reuters expected the company to earn $5.30 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net revenues for the quarter grew 17 percent to $1.76 billion and topped analysts' consensus estimate of $1.73 billion for the quarter. On a constant currency basis, net revenue advanced 19 percent from last year.

MasterCard attributed the revenue growth to an 18 percent rise in cross-border volumes, an 18 percent increase in gross dollar volume on a local currency basis, and 29 percent growth in processed transactions.

However, these factors were partially offset by an increase in rebates and incentives chiefly due to new and renewed agreements and increased volumes.

In Wednesday's session, MA is trading at $448.51, down $7.39 or 1.62 percent on a volume of 225,680 shares.

by RTTNews Staff Writer

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