Spending Growth Powers 21% Jump in 2Q Profits at MasterCard

By Matt Egan Industries FOXBusiness

MasterCard Earnings

Jo Ling Kent reports MasterCard has beaten estimates with its 2Q earnings.

MasterCard (MA) easily beat the Street on Wednesday with a 21% jump in second-quarter profits as the card giant capitalized on across-the-board spending growth.

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The stronger-than-anticipated results helped drive MasterCard’s stock almost 4% higher in premarket trading, putting it on track to set fresh all-time highs.

The company said it earned $848 million, or $6.96 a share, last quarter, compared with $700 million, or $5.55 a share, a year earlier. Analysts had been calling for EPS of just $6.30.

Revenue rose 15.2% to $2.1 billion, topping the Street’s view of $2 billion.

MasterCard reported an 11% jump in processed transactions to 9.5 billion and said its cross-border volume climbed 17%.

Gross dollar volume, measured on a local currency basis, soared 13% to just over $1 trillion.

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The growth in spending outpaced higher expenses, which increased 5% to $868 million during the second quarter.

“We had a very good second quarter supported by increases in volume and transactions in all regions of the world despite slow economic growth globally,” MasterCard CEO Ajay Banga said in a statement.

MasterCard said it repurchased about 1.1 million Class A common shares during the second quarter at a cost of about $581 million. Through July 25, the company said it bought back an additional $174 million during the third quarter, leaving about $1.1 billion left on its current buyback authorization.

Shares of Purchase, N.Y.-based MasterCard climbed 3.51% to $622.50 ahead of Wednesday’s opening bell. MasterCard has jumped 22% so far this year and almost 38% over the past 12 months.