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MasterCard earnings more than double
2008-04-29
MasterCard Inc (MA.N), a credit- and debit-card network, said first-quarter earnings more than doubled, beating expectations, helped by the weak dollar and increased customer spending on a growing number of outstanding cards, pushing its shares up more than 9 percent. The Purchase, New York-based company said quarterly net income was $446.9 million, or $3.38 a share, compared with $214.9 million, or $1.57 a share, a year earlier. Net income included $49 million, or 37 cents a share, from the termination of an agreement with a customer, and $56 million, or 42 cents a share, from the sale of a stake in credit-card services company Redecard S.A. in Brazil. It was not immediately clear which results were comparable to analysts' average forecasts of $2.00 a share, but according to Reuters Estimates MasterCard did beat expectations. Revenue rose 29.2 percent to $1.182 billion, helped by currency fluctuations and a 15.7 percent increase in the number of transactions processed. MasterCard also put pricing changes in effect, which helped boost revenue. Investors are concerned about how the economy will affect credit-card processors like MasterCard. The company does not make loans so it does not have credit risk, but if consumer spending slows, MasterCard's revenue could be hit. MasterCard Chief Executive Bob Selander said in a statement, "MasterCard continues to see growth in the U.S. region despite continued economic uncertainty." MasterCard shares rose 9.3 percent to $264.96 pre-market trading. (Reporting by Dan Wilchins, editing by Mark Porter and Gerald E. McCormick)
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