MasterCard Q1 Profit Rises, Tops View - Update

(RTTNews) - MasterCard Inc. (MA) Thursday reported an increase in profit for the first-quarter, reflecting revenue growth of 14 percent as shoppers continue to prefer credit and debit cards for payments. Both earnings and revenues for the quarter came in ahead of Wall Street estimates.

MasterCard Chief Executive Ajay Banga said, "We kicked off the year with a strong quarter, despite a mixed global economy. We secured several new agreements, including three of the largest retailers."

The New York-based company's first-quarter profit rose to $870 million or $0.73 per share from $766 million or $0.62 per share last year. On average, 31 analysts polled by Thomson Reuters expected earnings of $0.72 per share for the quarter. Analysts' estimates typically exclude special items.

MasterCard, the world's second-largest payment network, said its revenues for the quarter grew 14 percent to $2.18 billion from $1.91 billion last year. Wall Street analysts had a consensus revenue estimate of $2.14 billion for the quarter.

The company attributed the revenue growth to a 14 percent increase in gross dollar volume, on a local currency basis, to $1.0 trillion, an increase in processed transactions of 14 percent to 9.8 billion and an increase in cross-border volumes of 17 percent.

However, the revenue growth were partially offset by an increase in rebates and incentives, primarily due to new and renewed agreements and increased volumes.

MasterCard's global purchase volume increased 10 percent to $759 billion, while the US purchase volumes rose 8.6 percent to $268 billion from a year ago.

MasterCard benefited from increase in transactions using cards as adoption of electronic payments across the globe continues to strengthen, despite soft economic conditions.

Total operating expenses increased 12 percent to $892 million, primarily driven by higher investments to support of strategic initiatives.

MA is currently trading at $75.61, up $2.06 or 2.80%, on the NYSE.