Earnings Preview: MasterCard

MasterCard (MA) is expected to report Q3 earnings after market close Monday Nov. 3, with a conference call scheduled for 5:00 pm ET.

Guidance

Analysts are looking for EPS of $2.25 on revenue of $1.27B. The consensus range is $2.10 to $2.45 for EPS, and $1.25B to $1.31B for revenue, according to First Call.

Analyst Views

MasterCard investors may be encouraged by the American Express (AXP) and Visa (V) Q3 results. American Express reported EPS of 74c, easily beating analysts' consensus estimate of 59c, and Visa's EPS came in slightly ahead of the consensus. On the other hand, MasterCard announced that it would take a $515.5M charge related to the settlement of litigation against it by Discover Financial Services (DFS).

In addition, Citigroup recently slashed its target for MasterCard to $184 from $287, citing the global economic slowdown and risks caused by the consolidation of financial institutions. The firm maintained a Hold rating on the stock. Meanwhile, The New York Times predicted that the U.S. would be hit with a "credit card crisis," and cited analysts who expect the industry to write off $55B in bad debt over the next 18 months.