MasterCard 3rd-Quarter Net Up 14%
MasterCard Inc. (MA), the world's second-largest payment network, said third-quarter earnings rose 14% as spending on its credit and debit cards continued to grow.
MasterCard, like its larger rival Visa Inc. (V), operates a payments network that processes transactions made on debit and credit cards.
The Purchase, N.Y., company earned $879 million, or $7.27 a share, up from $772 million, or $6.17 a share, a year earlier.
Revenue grew 16% to $2.22 billion, driven by 16% higher processed transactions and a 19% increase in cross-border volume, which measures payments made in one country with a card issued by a bank in another country.
Analysts predicted earnings of $6.95 a share and revenue of $2.13 billion, according to a poll conducted by Thomson Reuters.
Cardholders made $763 billion in purchases on MasterCard-branded cards, up 14% on a local-currency basis from a year earlier. Purchase volume in the second quarter was up 12% on a local-currency basis.
Shares closed Wednesday at $725.68 and were up 1.2% premarket. The stock is up 48% so far this year.
MasterCard didn't address spending trends in the weeks following the quarter's end on Sept. 30. Investors were expected to be on the lookout for any hints about those trends during a morning conference call after rival Visa Inc. said Wednesday evening that spending growth had slowed in the first three weeks of October from levels seen in the previous quarter.
The Visa news was somewhat surprising since that company reported payments volume grew a healthy 13% for the three months ended Sept. 30.
Payments volume represents a barometer for the overall economy. Visa said the recent slowdown appears to be broad- based, including travel, supermarkets and other categories that are typically associated with small business.
Visa also cited the recent government shutdown, although that impact of that was difficult to quantify.
"This suggests the U.S. spending recovery is somewhat fragile, and perhaps hurt of late by the substantial political dysfunction in DC," said Rod Bourgeois, an analyst at Sanford C. Bernstein & Co., LLC, wrote in a report issued Thursday.
MasterCard said total operating expenses increased 14% from the year-ago period to $970 million, partly driven by marketing investments to support strategic initiatives.
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