HARRISON (dpa-AFX) - Payment card processor MasterCard, Inc. (MA) reported Friday a profit for the fourth quarter that grew 29 percent from last year, reflecting double-digit revenue growth as shoppers increasingly swiped credit cards to make payments during the holiday quarter instead of cash. Both earnings per share and quarterly revenues topped analysts' expectations.
The Purchase, New York-based world's second-largest credit and debit card company reported net income of $801 million or $0.69 per share for the fourth quarter, higher than $623 million or $0.52 per share in the prior-year quarter, which included $0.05 per share of special items.
On average, 34 analysts polled by Thomson Reuters expected the company to report earnings of $0.67 per share for the quarter. Analysts' estimates typically exclude one-time items.
Net revenues for the quarter grew 14 percent or 21 percent in constant currency, to $2.42 billion from $2.13 billion in the same quarter last year, and topped thirty-one Wall Street analysts' consensus estimate of $2.39 billion.
The company attributed the revenue growth to a 13 percent rise in gross dollar volume, on a local currency basis, to $1.2 trillion, a 19 percent rise in cross-border volumes and an 11 percent increase in processed transactions to 11.6 billion.
However, the company added that these factors were partially offset by an increase in rebates and incentives. Acquisitions contributed 3 percentage points to total net revenue growth.
Meanwhile, global purchase volumes also grew 12 percent on a local currency basis to $858 billion from last year. As of the end of the fourth quarter, MasterCard said its customers had issued 2.1 billion MasterCard and Maestro-branded cards.
Operating margin for the quarter contracted 120 basis points to 42.1 percent from a year ago. Total operating expenses increased 26 percent to $1.40 million, primarily driven by restructuring charges in support of strategic initiatives.
'Looking ahead, we will continue to be at the forefront of our industry by driving payment innovation with solutions such as MasterPass, and by increasing electronic payments usage globally as demonstrated by our significant expanded acceptance footprint across Africa,' President and CEO Ajay Banga said.
The company added that 2015 is off to a good start with several new wins, as well as renewals of some important customer agreements, with more in the pipeline.
MasterCard and its larger peer Visa Inc. (V) are benefiting from transaction fees amid increased adoption of electronic payments across the globe, despite soft economic conditions.
Visa reported Thursday a profit for the first quarter that increased eleven percent from last year, amid strong growth in card spending, and topped analysts' expectations. Operating revenues also grew 7 percent, driven by growth in service revenues, data processing revenues and international transaction revenues.
In Friday's regular trading session, MA is currently trading at $83.29, up $1.92 or 2.35% on a volume of 0.38 million shares. In the past 52-week period, the stock has been trading in a range of $68.68 to $89.87.
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