MasterCard Shares Rise on Earnings

PURCHASE, N.Y. (TheStreet) -- MasterCard(MA) shares surged in premarket action on news that third-quarter earnings rose 15% and handily beat Wall Street estimates.

For the September ending quarter, MasterCard said net income totaled $518 million, or $3.94 a share vs. $451 million, or $3.45 a share, in the year-earlier quarter. Revenue rose 4.7% to $1.43 billion. Analysts, on average, expected the payments firm to earn $3.54 a share on $1.41 billion of revenue.

On a constant currency basis, MasterCard's revenue rose 7.3% fueled by double-digit growth in cross border volumes as well as gross dollar volume gains of 8.5% and total global purchase volume increased 7.9% in the quarter, the company said.

However, MasterCard's purchased transactions for the quarter rose a slim 0.6% from the third quarter of 2009 to $5.8 billion.

MasterCard shares were rising 5.4% to $252 at last check. Visa (V), MasterCard's primary payments rival, saw its shares also moving 2% higher to $78.86. Shares of American Express (AXP) and Discover Financial (DFS) were also moving higher this morning.

Visa Quarterly Profit Up 50%

"Consumers and businesses around the world continue to recognize the benefits of electronic payments and MasterCard remains at the heart of this evolution," MasterCard's Chief Executive Ajay Banga said. "Our year-to-date net income is up over 22%, aided by strong volume growth from markets outside of the U.S."

Banga continued: "Leveraging our global presence and differentiated assets, we continued to win new deals and execute against our three strategic pillars to grow, diversify and build MasterCard's business."

The company is growing its debit portfolio, it says. New agreements include those with Capital One's (COF) Chevy Chase Bank, Banco Santander's (STD) Sovereign Bank, Delta Air Lines, and others outside the U.S. including Barclaycard in Germany and Qatar Islamic Bank.

"We are expanding our presence in new markets and channels, reflected in our memorandum of understanding with China Union Pay and an agreement with Singtel, one of the larger mobile operators in Asia. We also completed our acquisition of DataCash which enhances our e-Commerce capabilities," Banga added.

The firm's operating expenses decreased 4.1%, to $662 million, during the quarter. Excluding currency fluctuations, operating expenses were down 2.6%, it said. However, advertising and marketing expenses rose $8 million, or 4.7%, it said.

To contact the writer of this article, click here: Laurie Kulikowski.

To submit a news tip, send an email to: [e-mail].

Readers Also Like:

>>Five Things Wall Street Wants From Congress

>To order reprints of this article, click here: Reprints