Payment processing company MasterCard Inc. said its adjusted third-quarter profits rose slightly from a year ago, as the company saw solid growth in activity worldwide on its payment network.
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Like major US banks such as Wells Fargo (WFC – Get Report) and Bank of America (BAC – Get Report), the card processor benefited from shoppers putting more purchases on their debit and credit cards, a good sign for larger rival Visa (V – Get Report), which reports earnings next week.
During the quarter, MasterCard spent $930 million on share buyback. This, in turn, is expected to boost the revenues of the company.
MasterCard said Thursday it had net income of $1.03 billion, excluding a one-time $50 million charge tied to the termination of the company’s pension plan. Net revenue climbed 2% to $2.5 billion.
The results surpassed Wall Street expectations, with analysts surveyed by Zacks Investment Research looking for earnings of 88 cents per share.
Cross-border volumes – the value of transactions made by card holders outside the card-issuer’s country – jumped 16 percent. In all four arenas, MasterCard enjoyed local-currency growth in gross dollar volume and purchase volume of between 14% and 19%, with remarkably consistent performance across the world.
Total operating expenses were $1.1 billion up 1% year over year.
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Mastercard CEO and President Ajay Banga commented: “We are pleased with the results we delivered this quarter, in spite of the ongoing uncertainty in the global economy”. The MasterPass digital wallet is created to integrate digital payments more seamlessly into the checkout process, while EMV chips and biometrics have started to enhance security. The company in September forecast slower growth in earnings per share from 2016 to 2018 compared with the previous three-year period.
