Mastercard Earnings Top Estimates as Revenue Surges 14.6%

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October 28, 2016 8:42am NYSE:MA

mastercard-logoCredit card issuer Mastercard Inc (NYSE:MA) this morning posted better than expected third quarter earnings results, as higher processing volume offset rising expenses.

The Purchase, NY-based company reported Q3 EPS of $1.08, topping analysts’ $0.98 estimate by 10 cents. Revenue jumped 14.6% from last year to $2.9 billion, ahead of Wall Street’s $2.74 billion forecast.

Mastercard said that worldwide purchase volume in the latest period grew 9% to $882 billion. Meanwhile, processed transactions rose 18%, to 14.5 billion, and cross-border volumes rose 12%.

MA also reported an 11% increase in gross dollar volume to $1.2 trillion, excluding currency effects.

The company commented via press release:

“Our business continues to perform well, and we are pleased with our strong growth in revenue and earnings per share this quarter,” said Ajay Banga , Mastercard president and CEO. “We are executing on our strategy, deepening issuer relationships and delivering our customers and partners digital-first solutions. As a result, consumers benefit from seamless and secure purchase experiences everywhere and every way they shop.”

Total operating expenses increased 4%, or 5% on a currency-neutral basis, to $1.2 billion during the third quarter of 2016 compared to the same period in 2015. Excluding the special item taken in the year-ago period, total operating expenses increased 12%. The increase was primarily due to continued investments in strategic initiatives, foreign exchange activity and higher data processing expenses.

Mastercard shares rose $1.65 (+1.59%) to $105.25 in premarket trading Friday following the earnings release. Prior to today’s report, MA shares had gained 6.41% year-to-date, versus a 4.55% rise in the benchmark S&P 500 during the same period.


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