Shares of MasterCard climb after earnings
After news went out that the third quarter earnings of MasterCard have climbed by 15% beating all analysts’ estimates there was a significant rise in share value in premarket action. For the quarter ending with September, MasterCard announced that the net income was 518 million dollars. This represent a 3.94 dollar per share earnings compared to 3.45 dollars per share earnings from 451 million dollar income reported same time last year. The revenue has increased by 4.7% to touch 1.43 billion dollars. The expectation of the analysts was for the firm to earn 3.54 dollars per share with revenue of 1.41 billion dollars.
On the basis of a constant currency calculation, the revenue of MasterCard has jumped up 7.3%. This has largely been driven by a double digit growth in the volumes of cross border transactions along with the gross volume gains of the dollar of around 8.5 percent. The total purchase volume globally has also increased by 7.9% this quarter according to the company. The company’s purchased transactions for this quarter didn’t grow by much and only reported a slim 0.6% increase in the third quarter over the 5.8 billion dollar mark in 2009. The shares of MasterCard climbed 5.4% to reach 252 dollars. Meanwhile the main rival of MasterCard, Visa also witnessed its shares jumping 2% higher to reach 78.86 dollars. The pattern was also followed by shares of Discover Financial and American Express which were also seen moving up.
According to the chief executive of the company the benefits of electronic payments have been recognized by customers and businesses across the world. MasterCard continues to remain at the heart of this development. He also said that the year to date net income of the company has risen to over 22%, which has been supported by good volume growth from markets outside the US. He also said that MasterCard has been able to leverage its presence globally and assets, to win more deals and implement in line with the three strategic pillars of the company which include growing, diversifying and building the business.
The company is also looking to expand its portfolio for debit. There have been new deals with Capital One’s Chevy Chase Bank, Sovereign Bank of Banco Santander and Delta Air Lines. The company has also been able to reduce its operating expenses to 662 million dollars during this quarter which signifies a 4.1% drop. The expenses were down by 2.6% after excluding fluctuations in the currency.
