MASTERCARD reported profit that beat analysts’ estimates, helped by a boost in cross-border transactions.
The company posted adjusted earnings per share of US$3.89 in the third quarter on Thursday (Oct 31), topping analyst predictions for US$3.73. Global purchase volume climbed 11 per cent from a year earlier on a local-currency basis to US$2.058 trillion, surpassing analyst forecasts of US$2.054 trillion.
“These results reflect healthy consumer spending and ongoing solid demand for our value-added services and solutions,” chief executive officer Michael Miebach said in a statement on Wednesday.
Shares of the company were little changed at US$509.48 at 10.19 am in New York. They’ve gained 20 per cent this year.
Mastercard’s results show consumers are continuing to spend as interest rates begin to fall and inflation comes down further. Visa, the world’s biggest payments network, this week posted fiscal fourth-quarter earnings that beat Wall Street expectations as cross-border transactions increase. At Mastercard, cross-border volume on a local-currency basis gained 17 per cent.
Mastercard, based in Purchase, New York, said it expects net revenue to climb by a percentage in the low teens this quarter. The firm also expects an US$85 million charge in the quarter, based on interest-rate assumptions, chief financial officer Sachin Mehra said on a call with analysts on Thursday. Mehra said he was diagnosed last month with non-Hodgkin lymphoma, a type of blood cancer, but “I feel good and I’m happy to be here speaking with you today.”
Mastercard announced plans to cut 3 per cent of its staff worldwide in August, as it undertakes a reorganisation aimed at focusing on growth areas. The company said on Thursday that it took a pretax charge of US$190 million as part of that plan.
In June, a federal judge rejected a US$30 billion deal brokered by Mastercard and Visa with US merchants, shutting down an attempt to settle longstanding litigation over credit-card swipe fees. In the third quarter, Mastercard recorded a US$176 million provision for litigation. BLOOMBERG
