Tags: MasterCard | profit | credit | card

MasterCard Profit Tops Estimates as Spending Increases

Thursday, 30 October 2014 09:23 AM

MasterCard Inc., the second-largest U.S. payments network, posted third-quarter profit that beat analysts’ estimates as customer spending climbed.

Net income increased 15 percent to $1.02 billion, or 87 cents a share, from $879 million, or 73 cents, a year earlier, the Purchase, New York-based company said today in a statement. The average estimate of 33 analysts surveyed by Bloomberg was 78 cents.

Chief Executive Officer Ajay Banga, 54, has signed new credit-card deals with retailers including Wal-Mart Stores Inc. MasterCard also has increased prices for some processing services and partnered with technology companies including Apple Inc.

“One of the things that has been helping MasterCard materially has been pricing,” Jason Kupferberg, an analyst at Jefferies Group LLC, said before results were released. “They’ve done a couple of different price increases the past two years that continue to help the numbers.”

MasterCard rose in pre-market trading. It has fallen 9 percent this year through Wednesday, compared with the 12 percent advance of the 66-company Standard & Poor’s 500 Information Technology Index.

Geopolitical tensions have triggered a slowdown in travel outside the U.S. Earlier this year, the U.S. imposed sanctions after Russia invaded neighboring Ukraine, prompting lawmakers in Moscow to change the nation’s payments system and making it potentially more costly for foreign firms to operate. MasterCard and Visa Inc., the largest payments network, said U.S. relations with Russia could crimp this year’s earnings.

Apple Pay

In September, Apple announced it was partnering with MasterCard, Visa and American Express Co. on a mobile-payment system called Apple Pay.

MasterCard is scheduled to increase its fees for some U.S. banks in January, which could generate another $100 million in annual revenue, according to Tien-tsin Huang, a JPMorgan analyst.

Visa yesterday posted adjusted net income of $2.18 a share, beating analysts’ estimates, as consumer card spending abroad increased. American Express, the biggest U.S. credit-card issuer by purchases, said Oct. 15 that third-quarter profit rose 8.1 percent as spending on its network climbed. Discover Financial Services, the fourth-largest U.S. payments network, reported Oct. 21 that profit climbed 8.6 percent to $644 million.

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MasterCard, the second-largest U.S. payments network, posted third-quarter profit that beat analysts' estimates as customer spending climbed.
MasterCard, profit, credit, card
Thursday, 30 October 2014 09:23 AM
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