MasterCard Shares Plunge on Loss

MasterCard (MA Quote) plummeted as much as 12% Thursday after the company posted a huge quarterly loss, despite strong gains from its international business, following its settlement of antitrust litigation with American Express (AXP Quote).

Shares recouped slightly, though, and were recently down $21.64, or 8%, to $249.09.

In the three months ended June 30, the Purchase, N.Y.-based electronic-payments company posted a loss of $747 million, or $5.74 a share, which includes a $1 billion after-tax charge related to its settlement. MasterCard announced that it had reached an agreement with American Express last month.

Excluding the special item, MasterCard made $276 million, or $2.11 a share. In the year-earlier period, MasterCard earned $252 million, or $1.86 a share. Net revenue rose 25% to $1.2 billion, the company said.

Analysts estimated that the company would make $2.02 a share on $1.21 billion of revenue.

V vs. MA Visa vs. Mastercard
Company	Ticker	Price	EPS 08	P/E Ratio (2008)	EPS 09	P/E Ratio (2009)
Visa	V	78.45	2.03	38.65	2.55	30.76
MasterCard	MA	270.73	8.73	31.01	11.03	24.54

"We are pleased that we have been able to continue to deliver solid financial results in the current economic climate," CEO and President Robert Selander said in a statement. "Businesses, consumers and governments around the world are demonstrating a growing preference for electronic payments, and our cross-border volumes remain healthy as cardholders come to rely on electronic payments and the ease, security and convenience they provide. Additionally, more than 50% of our revenue is generated outside the U.S., which helps to moderate the impact of an economic downturn in one particular region."

Purchase volume worldwide rose 14% to $493 billion in the quarter, MasterCard said. Transaction volume rose 13.6% to 5.2 billion. MasterCard's gross dollar volume rose 12.8% to $655 billion.