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Coronavirus to Hit Mastercard Revenue

Mastercard expects first-quarter net revenue growth to be 2 to 3 percentage points lower than forecast at time of Jan. 29 earnings call.
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Mastercard  (MA) - Get Free Report warned late Monday that the effects of the coronavirus will result in slower revenue growth for the first quarter than the company guided for on its Jan. 29 earnings call.

Mastercard said in a statement that if current trends continue through the end of the quarter, “year-over-year net revenue growth in the first quarter will be approximately 2-3 percentage points lower than discussed on our January 29, 2020 earnings call.” The company added that in those circumstances it would “expect year-over-year net revenue growth of 9-10% in the first quarter.”

Last week, Apple Inc.  (AAPL) - Get Free Report also warned that the effects of the conronavirus would hurt its revenue for the current quarter.

Stocks fell sharply Monday, as the number of coronavirus cases outside China rose sharply, with outbreaks expanding in South Korea, Italy and Iran.

United Airlines  (UAL) - Get Free Report also warned late Monday, saying in an SEC filing that while it still expects first-quarter results within its previous projections, "beyond the first quarter, we believe the range of possible scenarios is too wide to provide earnings guidance at this time." 

 Mastercard shares fell $5.28, or 1.6% to $319.39 in after-hours trading Monday after losing 4.4% in the regular session., 

Mastercard beat Wall Street's fourth-quarter earnings forecasts, more than doubling its profit from a year earlier when it reported results at the end of January.

The Purchase, N.Y., company earned $2.1 billion, or $2.07 a share, in the quarter, compared with $900 million, or 87 cents, in the year-earlier quarter. Adjusted earnings came to $1.96 a share, beating the $1.87 a share consensus forecast in a survey by FactSet.

Revenue for the quarter totaled $4.4 billion, up 16% from a year earlier and matching Wall Street's projection.

Mastercard and Apple are  holdings in Jim Cramer's Action Alerts PLUS member club