Credit card company MasterCard, Inc. (MA) reported Wednesday a profit for the first quarter that rose 12 percent from last year, reflecting improved volumes as shoppers increasingly used credit cards instead of cash to make purchases.
MasterCard benefits from transaction fees amid increased adoption of electronic payments across the globe. Earnings per share topped analysts' expectations, while quarterly revenues missed their estimates.
"We are pleased with our first-quarter results as we delivered solid performance that met our expectations despite the mixed global economic environment. Since the start of the year, we have had steady momentum in new business, as well as product innovations," President and CEO Ajay Banga said in a statement.
The Purchase, New York-based company reported net income of $766 million or $6.23 per share for the first quarter, higher than $682 million or $5.36 per share in the prior-year quarter.
On average, 32 analysts polled by Thomson Reuters expected the company to report earnings of $6.17 per share for the first quarter. Analysts' estimates typically exclude one-time items.
Net revenues for the quarter grew 8 percent to $1.91 billion from $1.76 billion in the same quarter last year, but missed thirty Wall Street analysts' consensus estimate of $1.93 billion. Adjusted for currency, net revenue increased 9 percent.
The company attributed the revenue growth to a 12.1 percent rise in gross dollar volume to $947 billion, and a 10.5 percent increase in global purchase volume to $690 billion from last year.
The company also reported an increase in cross-border volumes of 16 percent and a growth in processed transactions of 12 percent to 8.7 billion.
As of the end of the first quarter, MasterCard's customers had issued 1.9 billion MasterCard and Maestro-branded cards.
"We signed new consumer credit agreements with Bank of America and TD Bank and secured significant wins in our APMEA region with Qantas, South Africa's NedBank, and Japan's Rakuten. We also signed an alliance with the Alibaba Group to explore opportunities in the Chinese market. In addition, we advanced our mobile and digital strategy with the commercial launch of MasterPass," Banga added.
In Wednesday's regular trading session, MA is currently trading at $539.13, down $13.80 or 2.50% on a volume of 66,236 shares. In the past 52-week period, the stock has been trading in a range of $389.90 to $552.93.
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