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Mastercard's (MA) Q3 Earnings Beat Estimates on Better GDV
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Mastercard Incorporated (MA - Free Report) reported third-quarter 2022 adjusted earnings of $2.68 per share, which outpaced the Zacks Consensus Estimate by 4.3%. The bottom line advanced 13% year over year.
The leading technology company in the global payments industry’s revenues amounted to $5.8 billion, which rose 15% year over year in the quarter under review. The top line beat the consensus mark by 1.8%.
Better consumer spending, recovery in cross-border travel, robust cross-border volume growth, higher gross dollar volume (GDV) and increased switched transactions contributed to the sound quarterly results of Mastercard. However, the upside was partly offset by rising operating expenses.
Mastercard Incorporated Price, Consensus and EPS Surprise
GDV (representing the aggregated dollar amount of purchases made and cash disbursements obtained from MasterCard-branded cards) improved 11% year over year on a local-currency basis to $2.1 trillion in the third quarter. Our estimate matched the metric.
Cross-border volumes (a key measure that tracks spending on cards beyond the issuing country) soared 44% year over year on a local-currency basis.
Switched transactions, which indicate the number of times a company’s products are used to facilitate transactions, came in at 32.4 billion. The metric rose 9% year over year.
Other revenues advanced 17% year over year, containing a 2% increase from acquisitions. Remaining growth resulted from Cyber & Intelligence and Data & Services solutions. Our estimate for other revenues indicates a 17.6% increase.
Rebates and incentives climbed 20% year over year in the quarter under review, while our estimate for the same suggests 18.6% growth.
MA’s clients issued 3 billion Mastercard and Maestro-branded cards as of Sep 30, 2022.
Operating expenses escalated 17% year over year to $2.6 billion, primarily due to higher general and administrative expenses.
Operating income of $3.1 billion grew 14% year over year in the third quarter, while our estimate for the metric stood at $3.2 billion. Operating margin improved 50 basis points (bps) year over year to 54.1%.
Balance Sheet (As of Sep 30, 2022)
Mastercard exited the third quarter with cash and cash equivalents of $7.6 billion, up 2.9% from the 2021-end level. The figure is way higher than the current portion of long-term debt ($957 million).
Total assets of $37.6 billion dipped 0.2% from the figure at 2021 end.
Long-term debt amounted to $13.6 billion, which increased 3.6% from the figure as of Dec 31, 2021.
Total equity of $6.4 billion dropped 13% from the 2021-end level.
Cash Flows
During the first nine months ended Sep 30, 2022, net cash provided by operating activities climbed 29% from the prior-year comparable period’s level to $8.1 billion.
Share Repurchase and Dividend Payout
Mastercard bought back 4.7 million shares for $1.6 billion in the third quarter. It had $5.1 billion left under its authorized share buyback program as of Oct 24, 2022.
Simultaneously, MA paid out dividends worth $474 million in the quarter under review.
Q422 Outlook
In the fourth quarter, management anticipates both net revenues and operating expenses to register low-end of low-double digit growth from the year-ago quarter’s reported figure.
2022 Outlook
Earlier, management had projected net revenues to witness low-end of high-teens growth from the 2021 figure.
Operating expenses were estimated to see the low-end of low double-digit growth from the 2021 figure.
Of the Business Services sector players that have already released third-quarter results so far, the bottom-line results of IQVIA Holdings Inc. (IQV - Free Report) , The Interpublic Group of Companies, Inc. (IPG - Free Report) and ManpowerGroup Inc. (MAN - Free Report) beat the respective Zacks Consensus Estimate.
IQVIA’s third-quarter 2022 adjusted earnings per share (excluding 99 cents from non-recurring items) of $2.48 beat the consensus mark by 3.8% and improved 14.3% on a year-over-year basis. Total revenues of $3.56 billion outpaced the consensus estimate by 0.5% and increased 5% year over year on a reported basis and 10.5% on a constant-currency basis. IQV’s adjusted EBITDA was $814 million, up 11.8% year over year.
Interpublic Group’s third-quarter adjusted earnings (excluding a penny from non-recurring items) of 63 cents per share beat the Zacks Consensus Estimate by 6.8%. The bottom line has been steady year over year. Net revenues of $2.3 billion beat the consensus estimate by 0.3% but declined 9.7% on a year-over-year basis. Total revenues of $2.64 billion increased 3.8% year over year. Operating income of IPG in the quarter came in at $341.8 million, down 2.8% from the prior-year quarter’s levels.
Manpower Group reported third-quarter 2022 adjusted earnings of $2.21 per share, which beat the consensus mark by 1.4% and improved 14.5% year over year. Revenues of $4.8 billion missed the consensus mark by 2% and decreased 6.6% year over year on a reported basis. Revenues increased 5% on a constant-currency (cc) basis and 2% on an organic cc basis. MAN’s Experis and Talent Solutions brands grew 5% and 10% year over year, respectively.
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Mastercard's (MA) Q3 Earnings Beat Estimates on Better GDV
Mastercard Incorporated (MA - Free Report) reported third-quarter 2022 adjusted earnings of $2.68 per share, which outpaced the Zacks Consensus Estimate by 4.3%. The bottom line advanced 13% year over year.
The leading technology company in the global payments industry’s revenues amounted to $5.8 billion, which rose 15% year over year in the quarter under review. The top line beat the consensus mark by 1.8%.
Better consumer spending, recovery in cross-border travel, robust cross-border volume growth, higher gross dollar volume (GDV) and increased switched transactions contributed to the sound quarterly results of Mastercard. However, the upside was partly offset by rising operating expenses.
Mastercard Incorporated Price, Consensus and EPS Surprise
Mastercard Incorporated price-consensus-eps-surprise-chart | Mastercard Incorporated Quote
Q3 Operational Performance
GDV (representing the aggregated dollar amount of purchases made and cash disbursements obtained from MasterCard-branded cards) improved 11% year over year on a local-currency basis to $2.1 trillion in the third quarter. Our estimate matched the metric.
Cross-border volumes (a key measure that tracks spending on cards beyond the issuing country) soared 44% year over year on a local-currency basis.
Switched transactions, which indicate the number of times a company’s products are used to facilitate transactions, came in at 32.4 billion. The metric rose 9% year over year.
Other revenues advanced 17% year over year, containing a 2% increase from acquisitions. Remaining growth resulted from Cyber & Intelligence and Data & Services solutions. Our estimate for other revenues indicates a 17.6% increase.
Rebates and incentives climbed 20% year over year in the quarter under review, while our estimate for the same suggests 18.6% growth.
MA’s clients issued 3 billion Mastercard and Maestro-branded cards as of Sep 30, 2022.
Operating expenses escalated 17% year over year to $2.6 billion, primarily due to higher general and administrative expenses.
Operating income of $3.1 billion grew 14% year over year in the third quarter, while our estimate for the metric stood at $3.2 billion. Operating margin improved 50 basis points (bps) year over year to 54.1%.
Balance Sheet (As of Sep 30, 2022)
Mastercard exited the third quarter with cash and cash equivalents of $7.6 billion, up 2.9% from the 2021-end level. The figure is way higher than the current portion of long-term debt ($957 million).
Total assets of $37.6 billion dipped 0.2% from the figure at 2021 end.
Long-term debt amounted to $13.6 billion, which increased 3.6% from the figure as of Dec 31, 2021.
Total equity of $6.4 billion dropped 13% from the 2021-end level.
Cash Flows
During the first nine months ended Sep 30, 2022, net cash provided by operating activities climbed 29% from the prior-year comparable period’s level to $8.1 billion.
Share Repurchase and Dividend Payout
Mastercard bought back 4.7 million shares for $1.6 billion in the third quarter. It had $5.1 billion left under its authorized share buyback program as of Oct 24, 2022.
Simultaneously, MA paid out dividends worth $474 million in the quarter under review.
Q422 Outlook
In the fourth quarter, management anticipates both net revenues and operating expenses to register low-end of low-double digit growth from the year-ago quarter’s reported figure.
2022 Outlook
Earlier, management had projected net revenues to witness low-end of high-teens growth from the 2021 figure.
Operating expenses were estimated to see the low-end of low double-digit growth from the 2021 figure.
Zacks Rank
Mastercard currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Business Services Sector Releases
Of the Business Services sector players that have already released third-quarter results so far, the bottom-line results of IQVIA Holdings Inc. (IQV - Free Report) , The Interpublic Group of Companies, Inc. (IPG - Free Report) and ManpowerGroup Inc. (MAN - Free Report) beat the respective Zacks Consensus Estimate.
IQVIA’s third-quarter 2022 adjusted earnings per share (excluding 99 cents from non-recurring items) of $2.48 beat the consensus mark by 3.8% and improved 14.3% on a year-over-year basis. Total revenues of $3.56 billion outpaced the consensus estimate by 0.5% and increased 5% year over year on a reported basis and 10.5% on a constant-currency basis. IQV’s adjusted EBITDA was $814 million, up 11.8% year over year.
Interpublic Group’s third-quarter adjusted earnings (excluding a penny from non-recurring items) of 63 cents per share beat the Zacks Consensus Estimate by 6.8%. The bottom line has been steady year over year. Net revenues of $2.3 billion beat the consensus estimate by 0.3% but declined 9.7% on a year-over-year basis. Total revenues of $2.64 billion increased 3.8% year over year. Operating income of IPG in the quarter came in at $341.8 million, down 2.8% from the prior-year quarter’s levels.
Manpower Group reported third-quarter 2022 adjusted earnings of $2.21 per share, which beat the consensus mark by 1.4% and improved 14.5% year over year. Revenues of $4.8 billion missed the consensus mark by 2% and decreased 6.6% year over year on a reported basis. Revenues increased 5% on a constant-currency (cc) basis and 2% on an organic cc basis. MAN’s Experis and Talent Solutions brands grew 5% and 10% year over year, respectively.