MasterCard Jumps on Strong Earnings

MasterCard was last up 10% to $172.80 in the pre-market, following its Q3 earnings release showing a 63% surge in net income to $314 million or $2.31/share on revenue growth of 20% to $1.08B. EPS were in-line with estimates and revenues beat estimates of $1.03B. MasterCard's earnings include a $0.51/share after-tax gain from the partial sale of an investment in Brazil's Redecard. Gross dollar volume increased 13% to $577B and purchase volume rose 14% to $477B. MasterCard reported a 13% increase in transactions processed to 4.8B, led by 21% cross-border volume growth. "We continue to benefit from positive secular trends and outstanding growth in international and emerging markets such as South
Asia/Middle East/Africa and Latin America," commented CEO Robert W. Selander. (Earnings call transcript later today). MasterCard had a positive forex impact of 2.3%. Operating expenses climbed 16% to $730M, due to a 26% rise (to $264M) in advertising and marketing expenses, while general and administrative costs increased 10% to $433M due to personnel hirings and incentive accruals. MasterCard said its Board has approved an incremental $750 million Class A repurchase program. Shares of MasterCard lost 0.1% to $157.15 on Tuesday.

Sources: Press release, MarketWatch
Commentary: Mastercard's Undeserved Decline is a Buying Opportunity ・How To Profit From The Visa IPO Before It Goes Public? ・Credit Card Companies Target Subprime Borrowers
Stocks to watch: MA. Competitors: AXP, DFS. ETFs: FPX

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Comments

[King Kang:]

With the continuation of the current credit squeeze, MasterCard will probably be a fairly safe investment, as long as the Directors ( www.newsvisual.com/new... ) can keep up the good numbers.

2007 Oct 31 06:38 PM