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MasterCard third quarter profit rises 82 percent on higher revenue
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NEW YORK -- MasterCard Inc., owner of the nation's second-largest credit card brand, said Wednesday its third-quarter profit climbed 82 percent, reflecting increased revenue and a higher number of purchases worldwide. Its shares climbed more than 15 percent in morning trading.
It was its first full quarter as a publicly traded company. Mastercard sold stock to the public for the first time in May. Larger rival Visa USA has since announced that it too will go public.
Purchase, N.Y.-based MasterCard said it earned $193 million, or $1.42 per share, for the three months ended Sept. 30 versus $106.1 million, or the equivalent of 79 cents a share, a year earlier when MasterCard was a private entity owned by the nation's largest banks.
Excluding special items from the third quarter last year, Chief Financial Officer Chris McWilton said net income was up by 38.8 percent. Those items included costs from settling litigation and a cash-based executive compensation plan.
Revenue rose 13.9 percent to $902 million from $791.6 million a year ago.
The latest results beat the consensus estimate of $1.07 in earnings per share on $871.2 million in revenue, according to a Thomson Financial poll.
"These strong results underscore our success in displacing paper-based forms of payment in all corners of the globe in the face of a highly competitive payments market," Chief Executive Robert W. Selander said in a statement.
MasterCard reported that its gross dollar volume, which includes revenue from purchases and cash advances, rose 15 percent to $502 billion. The number of transactions processed was up by 18.9 percent. McWilton said a greater number of purchases were made at lower amounts.
The number of credit cards issued by members of MasterCard's network rose 12.6 percent with 818 million cards being deployed as of Sept. 30.
MasterCard said operating expenses declined by 2.6 percent to $627 million, but excluding litigation and compensation costs recorded in the comparable period last year, expenses were actually higher by 8.8 percent.
Its shares rose $11.50, or 15.5 percent, to $85.60 in morning trading on the New York Stock Exchange.
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