(Adds additional details from earnings conference call, analyst comments and updated stock price.)PURCHASE, N.Y. ( TheStreet.com) -- MasterCard ( MA) charged past analyst expectations for the second quarter, but like its rival Visa ( V), the electronic payments network is not immune to the global economic recession. MasterCard reported a 26.4% increase in net income to $349 million, or $2.67 per diluted share, vs. the year-ago period, excluding a special item from last year. Net revenue jumped 2.7% to $1.27 billion, fueled by higher pricing, increased transactions on debit cards and decreases in the number of rebates and incentives it doled out during the quarter. In the year-earlier quarter, MasterCard recorded a $1.65 billion charge related to litigation settlements. MasterCard recorded an additional $500,000 charge last quarter also for litigation. Analysts polled by Thomson Financial had expected earnings of $2.42 a share on revenue of $1.25 billion. Excluding special items, MasterCard's operating expenses fell 13% to $722 million, mainly due to decreased advertising and marketing costs, the company said. "We are very pleased with our second-quarter financial performance and are adapting well to the challenging economic environment," CEO Robert Selander said. "The thoughtful actions we've taken to realign our resources and priorities to match customer and local market needs, as well as our sharp focus on expense management, have enabled us to deliver strong operating margin and net income improvements. "At the same time, we continue to invest in the future so that we are solidly positioned once the economic tide begins to turn," Selander said. "We operate a global, flexible and resilient business that will continue to benefit from the ongoing shift toward electronic payments, which consumers, businesses and governments find more efficient, secure and easier to manage."