MasterCard Shares Surge on Profit Beat
MasterCard
(MA) - Get Report
shares surged 13% Tuesday, after the electronic payment processor easily beat expectations, fueled by strong international growth and consumers' increasing use of plastic in making payments.
The Purchase, N.Y., company reported a net profit of $446.9 million, or $3.38 a diluted share, vs. $214.9 million, or $1.57 a share in the year-ago period. Excluding special items such as the termination of a customer agreement and the sale of its interest in Brazil's Redecard, the company posted a profit of $2.59 a share, well above the consensus estimate of $2 a share, according to Thomson Financial.
The company posted revenue of $1.18 billion, a 29% increase from the year ago period. Analysts saw revenue of $1.07 billion.
"We are very pleased with our first-quarter financial results, which reflect the strong positioning of our unified global business," President and CEO Robert Selander said in a company statement. "Regions outside the U.S., such as Latin America and South Asia, Middle East and Africa, are driving significant growth, and cross-border volumes remain healthy as cardholders continue to travel and prefer the use of electronic over paper- based forms of payment."
Worldwide purchase volume grew 15% to $453 billion vs. a year ago.
The U.S. still provided the bulk of the company's transaction volume with $206 billion, 10.3% growth vs. the year-ago period. But steady growth in overseas market boosted returns. European transactions grew 18% to $136 billion; Asia Pacific transactions grew 22.3% to $62 billion; Latin American transactions grew 22.7% to $22 billion; and South Asia, the Middle East and Africa grew 26.9% to $6 billion.
The company bought 1.5 million shares of its own stock for a total of $294 million in the first quarter under an existing stock repurchase program. As of April 29, the company had in total bought $1.02 billion of the $1.25 billion worth of shares authorized to be repurchased by its board.
Rival
Visa
(V) - Get Report
on late Monday also
easily beat analysts estimates
in its first quarter as a public company.
MasterCard and Visa, which only process the transactions and do not hold consumer debt on their books, have fared better than rivals
American Express
(AXP) - Get Report
,
Capital One Financial
(COF) - Get Report
and
Discover Financial Services
(DFS) - Get Report
.
The stock closed up $31.48 to $273.98 Tuesday.
This article was written by a staff member of TheStreet.com.