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Mastercard (MA) Q4 Earnings Beat on Steady Consumer Spending
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Mastercard Incorporated (MA - Free Report) reported fourth-quarter 2023 adjusted earnings of $3.18 per share, which outpaced the Zacks Consensus Estimate by 3.3%. The bottom line climbed 20% year over year.
Net revenues of the leading technology company in the global payments industry amounted to $6.5 billion, which improved 13% year over year in the quarter under review. The top line beat the consensus mark by 1.4%.
The quarterly results benefited on the back of resilient consumer spending and solid cross-border volumes. An expanding payment network, and value-added services and solutions also contributed to the quarterly results. However, the upside was partly offset by an increase in operating expenses.
Mastercard Incorporated Price, Consensus and EPS Surprise
Gross dollar volume (representing the aggregated dollar amount of purchases made and cash disbursements obtained from Mastercard-branded cards) rose 10% on a local-currency basis to $2.4 trillion in the fourth quarter. The figure almost touched the Zacks Consensus Estimate and surpassed our estimate of $2.3 trillion.
Cross-border volumes (a key measure that tracks spending on cards beyond the issuing country) advanced 18% on a local currency basis. Switched transactions, which indicate the number of times a company’s products have been used to facilitate transactions, were 38.1 billion in the quarter under review. The figure grew 12% year over year and beat the consensus mark of 37.6 billion.
Value-added services and solutions net revenues of $2.7 billion improved 19% year over year and came higher than the Zacks Consensus Estimate of $2.5 billion and our estimate of $2.4 billion. The growth can be attributed to the strength in cyber and intelligence solutions along with the enhancement of its consulting, marketing, data analytics and loyalty solutions.
Payment network rebates and incentives escalated 19% year over year in the fourth quarter as an impact of new and renewed deals.
MA’s clients issued 3.3 billion Mastercard and Maestro-branded cards as of Dec 31, 2023.
Operating expenses of $3.2 billion increased 21% year over year due to an elevated personnel cost level. The figure was higher than our estimate of $2.9 billion.
Mastercard’s operating income advanced 6% year over year to $3.4 billion but fell short of our estimate of $3.6 billion. Operating margin of 51.5% improved 320 basis points year over year in the quarter under review.
Balance Sheet (as of Dec 31, 2023)
Mastercard exited the fourth quarter with cash and cash equivalents of $8.6 billion, which increased 22.5% from the 2022-end level. The figure is way higher than the current portion of long-term debt ($1.3 billion).
Total assets of $42.4 billion grew 9.6% from the figure at 2022 end.
Long-term debt amounted to $14.3 billion, up 4.3% from the figure as of Dec 31, 2022.
Total equity of $7 billion improved 9.7% from the 2022-end level.
Solid Cash Flows
Mastercard generated cash flows from operations of $12 billion in 2023, which advanced 7% from the 2022 figure.
Capital Deployment Update
Mastercard bought back 4.5 million shares for $1.8 billion in the fourth quarter. It had a leftover buyback capacity of $13.6 billion as of Jan 26, 2024. MA paid out dividends worth $534 million in the quarter under review.
1Q24 Guidance
Management projects net revenues to register low-end of low-double-digit growth on a year-over-year basis in the first quarter of 2024, while GAAP operating expenses are anticipated to record a minimum year-over-year growth.
2024 View
Management forecasts net revenue growth to witness the high-end of low-double-digit growth from the 2023 reported figure of $25.1 billion. GAAP operating expenses are estimated to increase in mid-single-digit from the 2023 figure of $11.1 billion.
Zacks Rank
Mastercard currently carries a Zacks Rank #3 (Hold).
Upcoming Earnings Releases
Here are three companies from the Business Services space that are set to report their quarterly earnings soon.
The Zacks Consensus Estimate for DUOL’s fourth-quarter 2023 earnings is pegged at 17 cents per share. A loss of 35 cents per share was reported in the prior-year quarter
Duolingo’s earnings beat estimates in each of the trailing four quarters, the average surprise being 114.01%.
Omnicom Group Inc. (OMC - Free Report) has an Earnings ESP of +1.08% and a Zacks Rank #2 (Buy) at present. The Zacks Consensus Estimate for OMC’s fourth-quarter 2023 earnings is pinned at $2.16 per share, implying 3.4% growth from the year-ago quarter’s reported figure.
Omnicom’s earnings beat estimates in each of the trailing four quarters, the average surprise being 5.47%.
Rollins, Inc. (ROL - Free Report) currently has an Earnings ESP of +2.44% and a Zacks Rank of 3. The Zacks Consensus Estimate for ROL’s fourth-quarter 2023 earnings is pegged at 21 cents per share, suggesting a 23.5% rise from the prior-year quarter’s reported number.
Rollins’ earnings beat estimates in three of the trailing four quarters and matched the mark once, the average surprise being 7.20%.
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Mastercard (MA) Q4 Earnings Beat on Steady Consumer Spending
Mastercard Incorporated (MA - Free Report) reported fourth-quarter 2023 adjusted earnings of $3.18 per share, which outpaced the Zacks Consensus Estimate by 3.3%. The bottom line climbed 20% year over year.
Net revenues of the leading technology company in the global payments industry amounted to $6.5 billion, which improved 13% year over year in the quarter under review. The top line beat the consensus mark by 1.4%.
The quarterly results benefited on the back of resilient consumer spending and solid cross-border volumes. An expanding payment network, and value-added services and solutions also contributed to the quarterly results. However, the upside was partly offset by an increase in operating expenses.
Mastercard Incorporated Price, Consensus and EPS Surprise
Mastercard Incorporated price-consensus-eps-surprise-chart | Mastercard Incorporated Quote
Q4 Operational Performance
Gross dollar volume (representing the aggregated dollar amount of purchases made and cash disbursements obtained from Mastercard-branded cards) rose 10% on a local-currency basis to $2.4 trillion in the fourth quarter. The figure almost touched the Zacks Consensus Estimate and surpassed our estimate of $2.3 trillion.
Cross-border volumes (a key measure that tracks spending on cards beyond the issuing country) advanced 18% on a local currency basis. Switched transactions, which indicate the number of times a company’s products have been used to facilitate transactions, were 38.1 billion in the quarter under review. The figure grew 12% year over year and beat the consensus mark of 37.6 billion.
Value-added services and solutions net revenues of $2.7 billion improved 19% year over year and came higher than the Zacks Consensus Estimate of $2.5 billion and our estimate of $2.4 billion. The growth can be attributed to the strength in cyber and intelligence solutions along with the enhancement of its consulting, marketing, data analytics and loyalty solutions.
Payment network rebates and incentives escalated 19% year over year in the fourth quarter as an impact of new and renewed deals.
MA’s clients issued 3.3 billion Mastercard and Maestro-branded cards as of Dec 31, 2023.
Operating expenses of $3.2 billion increased 21% year over year due to an elevated personnel cost level. The figure was higher than our estimate of $2.9 billion.
Mastercard’s operating income advanced 6% year over year to $3.4 billion but fell short of our estimate of $3.6 billion. Operating margin of 51.5% improved 320 basis points year over year in the quarter under review.
Balance Sheet (as of Dec 31, 2023)
Mastercard exited the fourth quarter with cash and cash equivalents of $8.6 billion, which increased 22.5% from the 2022-end level. The figure is way higher than the current portion of long-term debt ($1.3 billion).
Total assets of $42.4 billion grew 9.6% from the figure at 2022 end.
Long-term debt amounted to $14.3 billion, up 4.3% from the figure as of Dec 31, 2022.
Total equity of $7 billion improved 9.7% from the 2022-end level.
Solid Cash Flows
Mastercard generated cash flows from operations of $12 billion in 2023, which advanced 7% from the 2022 figure.
Capital Deployment Update
Mastercard bought back 4.5 million shares for $1.8 billion in the fourth quarter. It had a leftover buyback capacity of $13.6 billion as of Jan 26, 2024. MA paid out dividends worth $534 million in the quarter under review.
1Q24 Guidance
Management projects net revenues to register low-end of low-double-digit growth on a year-over-year basis in the first quarter of 2024, while GAAP operating expenses are anticipated to record a minimum year-over-year growth.
2024 View
Management forecasts net revenue growth to witness the high-end of low-double-digit growth from the 2023 reported figure of $25.1 billion. GAAP operating expenses are estimated to increase in mid-single-digit from the 2023 figure of $11.1 billion.
Zacks Rank
Mastercard currently carries a Zacks Rank #3 (Hold).
Upcoming Earnings Releases
Here are three companies from the Business Services space that are set to report their quarterly earnings soon.
Duolingo, Inc. (DUOL - Free Report) has an Earnings ESP of +22.09% and sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DUOL’s fourth-quarter 2023 earnings is pegged at 17 cents per share. A loss of 35 cents per share was reported in the prior-year quarter
Duolingo’s earnings beat estimates in each of the trailing four quarters, the average surprise being 114.01%.
Omnicom Group Inc. (OMC - Free Report) has an Earnings ESP of +1.08% and a Zacks Rank #2 (Buy) at present. The Zacks Consensus Estimate for OMC’s fourth-quarter 2023 earnings is pinned at $2.16 per share, implying 3.4% growth from the year-ago quarter’s reported figure.
Omnicom’s earnings beat estimates in each of the trailing four quarters, the average surprise being 5.47%.
Rollins, Inc. (ROL - Free Report) currently has an Earnings ESP of +2.44% and a Zacks Rank of 3. The Zacks Consensus Estimate for ROL’s fourth-quarter 2023 earnings is pegged at 21 cents per share, suggesting a 23.5% rise from the prior-year quarter’s reported number.
Rollins’ earnings beat estimates in three of the trailing four quarters and matched the mark once, the average surprise being 7.20%.