Midday Market Minute: Global Growth Boosts MasterCard 4Q Net Income
Jan 31st 2013 12:00PM
Updated Jan 31st 2013 12:08PM
By DANIEL WAGNER
MasterCard's (MA) net income rebounded strongly in the fourth quarter as its overseas business continued to expand, the company said Thursday.
The results benefited by comparison to the year-earlier quarter, which was weighed down by a massive legal charge.
Net income in the three months ended Dec. 31 rose to $605 million, or $4.86 per share, from $19 million, or 15 cents per share, a year earlier.
Net revenue rose 10 percent to $1.90 billion. MasterCard continued to grow by most measures: It processed 20 percent more transactions than a year ago, including 17 percent higher cross-border volumes.
MasterCard is expanding most quickly in Latin America and the region that includes Asia, the Middle East and Africa. Outside the United States, the volume of cash moved in 2012 increased 23.5 percent on a U.S. dollar basis. That compares with growth of 9.7 percent inside the U.S.
The company also has been trying to gain market share in the U.S. credit card market. To that end, it announced a number of partnerships with big consumer brands, including InterContinental Hotel Group, Bass Pro Shops and Shell Oil.
Strong partnerships will add to MasterCard's dollar volumes, but may take some time to have a visible effect, Chief Financial Officer Martina Hund-Mejean said in an interview.
"When you sign an agreement, you have to actually roll out the cards to the consumer in the market, and then you have to get the consumer to use those cards," she said.
The Purchase, N.Y.-based payments network took a charge of nearly $500 million in the year-earlier quarter. The charge covered the cost of a settlement with retailers over the fees they pay on credit card transactions.
For 2012, MasterCard earned $2.76 billion, or $21.94 per share, on revenue of $7.39 billion.
During the quarter, management repurchased 1.3 million shares for $613 million. Repurchasing shares is a way of returning profits to shareholders. It boosts the value of each share that remains in investors' hands.
The quarterly results beat analysts' estimates. Shares were roughly flat in morning trading, up 27 cents at $516.27.