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Mastercard Stock Edges Higher As Spending Surge Drives Q2 Earnings Beat

“Increasing inflationary pressures have yet to significantly impact overall consumer spending but we will continue to monitor this closely," said CEO Michael Miebach.

Updated at 9:36 am EST

Mastercard Inc.  (MA)  posted better-than-expected second quarter earnings Thursday, following similar strength from card rival Visa  (V) , as consumer and travel spending continued to power higher despite ongoing concerns over the health of the domestic economy.

Mastercard said diluted earnings for the three months ending in June were pegged at $2.56 per share, up 31.3% from the same period last year and firmly ahead of the Street consensus forecast of $2.36 per share. 

Group revenues, Mastercard said, rose 21.4% to $5.5 billion, just ahead of analysts' estimates of a $5.26 billion tally. Gross dollar volumes were up 14%, the group said, while purchase volumes rose 18%. 

“We had strong revenue and earnings growth again this quarter, as overall consumer spending remained robust and cross-border volumes grew 58% versus year ago” said CEO Michael Miebach. “Increasing inflationary pressures have yet to significantly impact overall consumer spending but we will continue to monitor this closely." 

"We have a well-diversified business model and the demonstrated ability to deliver strong operating margins through up and down cycles,” he added.  

Mastercard shares were marked 2.5% higher in early Thursday trading immediately following the earnings release to change hands at $351.26 each.

Gains could be limited by a report released yesterday from the Wall Street Journal, which suggested Senate lawmakers are preparing a bill aimed at reducing credit card fees.

The Journal said the bi-partisan bill, which could be introduced over the coming days by Senators Dick Durbin and Roger Marshall, is aimed at creating more competition in the $164 billion credit card market.

Earlier this week, card rival Visa topped Street earnings forecast with a bottom line of $1.98 per share, with revenues rising 19% to a Street-beating $7.3 billion. Cross border spending was up 40%, Visa said, with payments volume up 12% on a constant-currency basis.

Last week, American Express  (AXP)  posted better-than-expected second quarter earnings Friday, and boosted its full-year revenue growth forecast, as a rebound in business and leisure travel trigged record cardmember spending.

Cardmember spending was up 30%, American Express said, while expenses rose 31% to $13.4 billion, thanks in part to the group's focus on reward payouts to entice new members, with that tally coming in at 3.2 million.

Looking into the second half of the year, American Express said it now expects group revenues to rise by between 23% and 25%, up from its prior forecast of between 18% and 20%.