MasterCard Incorporated (MA - Analyst Report), operates the world’s second-largest retail electronic payments network.
MasterCard continues to drive growth through increased cross-border volumes and improved pricing along with consistent growth of processed transactions.
MasterCard has been consistently expanding its geographic footprint, which has resulted in an increase in membership. This, in turn, is expected to boost the revenues of the company.
New global agreement wins and tie ups with regional banks in U.S. has also increased its client base.Â
Moreover, MasterCard enjoys ample competitive advantage and a sufficiently risk-free balance sheet, which supports efficient capital deployment by generating incremental shareholder value.
MasterCard has a pretty good earnings track record with the company delivering positive earnings surprises in three out of the last four quarters with an average surprise of 6.2%.
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Currently, MasterCard has a Zacks Rank #3 (Hold). But that could definitely change following the company’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings:Â MasterCard reported earnings per share of 79 cents per share beating the Zacks Consensus Estimate of 68 cents per share. Earnings grew 14.5% year over year.
Revenues:Â Revenues came in below the expectations. MasterCard posted revenues of $2.52 billion was below our estimates of $2.55 billion. On an year over year basis revenues increased 4.4%.
Key Stats:Â The company reported an increase in cross border volumes of 12%, processed transactions increased 12% to $13 billion. Worldwide purchase volume during the quarter was up 12% on a local currency basis.
Total operating expenses were $1.4 billion up 1% year over year. The company delivered an operating margin of 44%.
MasterCard’s effective tax rate was 13.1% in the fourth quarter of 2015, versus a rate of 20.3% in the year ago quarter.
During the quarter, MasterCard spent $793 million on share buyback.
