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MasterCard: Volume Growth Drives Earnings Beat in Q2
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MasterCard Incorporated (MA - Free Report) reported earnings of 96 cents surpassing the Zacks Consensus Estimate of 90 cents per share. Earnings were up 13% year over year.
MasterCard posted revenues of $2.69 billion, which beat the Zacks Consensus Estimate of $2.6 billion. On a year-over-year basis, revenues increased 13%. Adjusted for currency, net revenue climbed 14% year over year.
The upside was primarily driven by a 14% rise in the number of processed transactions to 13.7 billion along with a 10% increase in cross-border volumes. These were partially offset by higher rebates and incentives, primarily attributable to new and renewed business alliances and increased volumes.
During the reported quarter, worldwide purchase volume rose 9% year over year – on a constant currency basis – to $897 billion. As of Jun 30, 2016, MasterCard issued 2.3 billion MasterCard and Maestro branded cards.
MasterCard witnessed a year-over-year increase of 15%, or 17% on currency adjusted basis, in total operating expense to $1.3 billion due to continued investments in strategic initiatives, as well as higher legal costs.
Operating income was $1.4 billion in the reported quarter, up 13%, or 15% on currency adjusted basis. Interest expenses increased to $22 million from $17 million in the prior-year quarter.
MasterCard’s effective tax rate in the quarter was 27.9% compared with 25.8% in the year-ago quarter. The rise was primarily due to the non-recurrence of a discrete U.S. foreign tax credit benefit in the quarter. The company’s operating margin came in at 55.2%.
Financial Update
As of Jun 30, 2016, MasterCard’s cash and cash equivalents decreased to $.2 billion from $5.7 billion at year-end 2015. Long-term debt rose to $3.31 billion from $3.27 billion as of Dec 31, 2015. Total equity declined to $5.9 billion from $6.1 billion on Dec 2015.
Share Repurchase Update
During the reported quarter, MasterCard repurchased around 5 million shares of Class A common stock worth almost $462 million. Subsequent to the first quarter to date, the company hasn’t bought back any more shares. The company is now left with shares worth $2.7 billion under its buyback authorization.
Zacks Rank and Performance of Other Financial Transaction Service Providers
MasterCard currently carries a Zacks Rank #3 (Hold). Some other financial transaction service providers have also released their earnings results. The bottom lines at Visa Inc. (V - Free Report) , American Express Co. (AXP - Free Report) and Total System Services, Inc. have surpassed their Zacks Consensus Estimate.
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MasterCard: Volume Growth Drives Earnings Beat in Q2
MasterCard Incorporated (MA - Free Report) reported earnings of 96 cents surpassing the Zacks Consensus Estimate of 90 cents per share. Earnings were up 13% year over year.
MasterCard posted revenues of $2.69 billion, which beat the Zacks Consensus Estimate of $2.6 billion. On a year-over-year basis, revenues increased 13%. Adjusted for currency, net revenue climbed 14% year over year.
The upside was primarily driven by a 14% rise in the number of processed transactions to 13.7 billion along with a 10% increase in cross-border volumes. These were partially offset by higher rebates and incentives, primarily attributable to new and renewed business alliances and increased volumes.
During the reported quarter, worldwide purchase volume rose 9% year over year – on a constant currency basis – to $897 billion. As of Jun 30, 2016, MasterCard issued 2.3 billion MasterCard and Maestro branded cards.
MasterCard witnessed a year-over-year increase of 15%, or 17% on currency adjusted basis, in total operating expense to $1.3 billion due to continued investments in strategic initiatives, as well as higher legal costs.
Operating income was $1.4 billion in the reported quarter, up 13%, or 15% on currency adjusted basis. Interest expenses increased to $22 million from $17 million in the prior-year quarter.
MasterCard’s effective tax rate in the quarter was 27.9% compared with 25.8% in the year-ago quarter. The rise was primarily due to the non-recurrence of a discrete U.S. foreign tax credit benefit in the quarter.
The company’s operating margin came in at 55.2%.
Financial Update
As of Jun 30, 2016, MasterCard’s cash and cash equivalents decreased to $.2 billion from $5.7 billion at year-end 2015. Long-term debt rose to $3.31 billion from $3.27 billion as of Dec 31, 2015. Total equity declined to $5.9 billion from $6.1 billion on Dec 2015.
Share Repurchase Update
During the reported quarter, MasterCard repurchased around 5 million shares of Class A common stock worth almost $462 million. Subsequent to the first quarter to date, the company hasn’t bought back any more shares. The company is now left with shares worth $2.7 billion under its buyback authorization.
MASTERCARD INC Price, Consensus and EPS Surprise
MASTERCARD INC Price, Consensus and EPS Surprise | MASTERCARD INC Quote
Zacks Rank and Performance of Other Financial Transaction Service Providers
MasterCard currently carries a Zacks Rank #3 (Hold). Some other financial transaction service providers have also released their earnings results. The bottom lines at Visa Inc. (V - Free Report) , American Express Co. (AXP - Free Report) and Total System Services, Inc. have surpassed their Zacks Consensus Estimate.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>