Summary: Mastercard's net income grew 82%, surpassing analysts' expectations as the second-largest credit card company benefitted from increased spending and fees for overseas purchases. In the first full quarter since Mastercard went public in May, it reported a net income of $193 million, or $1.42 a share, compared to $106.1 million, or 79 cents last year, and exceeded analysts' estimates of $1.07 a share. Mastercard cut its operating expenses and pruned 4.6% from its advertising budget. More frequent use of credit cards and new prices for overseas purchases were partly responsible for the 19% rise in transactions for the quarter, offsetting legal woes which are also affecting its rival, Visa. Overseas merchants claim the credit card companies are involved in price-fixing with banks, but both Visa and Mastercard have denied these allegations.
Related links: Visa IPO Should Pose Challenge to MasterCard • For Credit Card Issuers, The Sky's the Limit When It Comes to Rewarding Customers • An In-Depth Look At MasterCard's IPO (MA)
Potentially impacted stocks and ETFs: Mastercard (MA) • Competitor: American Express (AXP)
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