MasterCard's Profit Tops Street View

MasterCard posted third-quarter earnings that beat analyst expectations as pricing changes and a boost in overall transaction volume drove topline growth.
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reported a third-quarter profit of $456 million, or $3.48 a share, widely exceeding Wall Street's consensus estimate.

Including special items, the electronic payments company earned $452 million, or $3.45 a share, for the three months ended Sept. 30. The latest quarter included a charge of $6.2 million, before taxes, related to a litigation settlement.

Revenue rose 2% in the third quarter to $1.4 billion, also surpassing analysts' expectations. The company attributed the topline outperformance to pricing changes and an increased number of transactions processed in the quarter to 5.8 billion. On a constant currency basis, revenue rose 3.9% in the period from a year ago.

The average estimate of analysts polled by Thomson Reuters was for a profit of of $2.94 a share in the September period on $1.35 billion of revenue.

In the year-ago quarter, MasterCard posted a loss of $193.5 million, or $1.49 a share. That figure reflected a pre-tax charge of $827.5 million related to antitrust litigation settlement with

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Still the impact of the recessionary economic environment was evident. MasterCard's gross dollar volume was relatively flat at $633 billion for the quarter, while cross border volumes were lower compared to levels a year earlier.

Worldwide purchase volume during the quarter was also relatively flat, up just 0.4% on a local currency basis, vs. the third quarter of 2008, to $480 billion, it said.

Total operating expenses fell 13.3%, excluding special items, to $685 million, MasterCard said.

MasterCard's CEO Robert Selander said in a statement that the company is beginning to see "signs of stabilization in parts of our business," echoing his counterpart at


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"Total processed transactions continued to grow at a high single-digit rate, with double-digit growth coming from our Asia Pacific/Middle East/Africa and Latin America regions," Selander said. "At the same time, our overall cross-border volumes are steadying with our Asia Pacific region demonstrating significant growth in the quarter, and the U.S. showing a lower rate of decline. We continued to aggressively manage costs and improve margins, while still investing in key growth areas across our business.

"Overall, our results once again underscore the global trend toward electronic payments, and the strength of our business model," Selander added. "We continue to make life easier for consumers, businesses and governments, all of whom seek safer, more controllable and more efficient payment alternatives for everyday commerce."

MasterCard's conference is set to begin at 9am EST.

Shares were rising 1.5% in premarket trading.

-- Written by Laurie Kulikowski in New York