Laurie Kulikowski
MasterCard(MA Quote - Cramer on MA - Stock Picks) shares soared to an all-time high Thursday after the company offered a bullish near-term outlook, despite a slowdown in the U.S. economy.
Executives at the Purchase, N.Y.-based card processor, during a four-hour long investor presentation, also said they expect double-digit revenue growth in 2008 and double-digit profit and revenue growth over the next few years. MasterCard expects average annual net revenue growth in the range of 12% to 15% over the long term, while annual net income could increase by 20% to 30% going forward, and operating profit margins should rise by three to five percentage points, executives said. The news sent shares of MasterCard up more than 10% to $316.96 on Thursday. More recently, the stock has retreated slightly, but was still up 8.4% to $311.09, on trading volume of more than 10 million shares, or more than triple what the stock normally trades in a day. Shares of its larger rival Visa(V Quote - Cramer on V - Stock Picks) also spiked as much as 6%, while competitors Discover Financial Services(DFS Quote - Cramer on DFS - Stock Picks) and American Express(AXP Quote - Cramer on AXP - Stock Picks) rose between 1% and 2%. MasterCard said the key drivers to the revenue and operating margin guidance include the secular trend away from paper and toward electronic payments. It also cited the growth of non-U.S. markets at a faster rate than the U.S., while the company also plans to ramp up its debit card market share, among other things. "There are more opportunities for us than threats," CEO Robert Selander said. But despite the positive guidance, several executives who gave presentations took a cautious tone when it came to the U.S. economy.
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