MasterCard posts 2Q profit jump of 15 percent
ASSOCIATED PRESS Nov 2, 2010
Updated: November 6, 2010 8:34AM
NEW YORK - MasterCard Inc. on Tuesday said increased use of credit and debit cards overseas helped lift its third-quarter profit by 15 percent.
The payments processor recorded a net income of $518 million, or $3.94 per share for the three months ended Sept. 30, compared with $452 million, or $3.45 per share, in the year-ago quarter.
Revenue rose 5 percent to $1.43 billion, from $1.36 billion last year.
Analysts polled by Thomson Reuters, on average, were expecting profit of $3.54 per share, on revenue of $1.41 billion.
Purchases on credit and charge cards in the U.S. dipped 0.7 percent, to $132 billion. Domestic debit card purchases dropped 5 percent, to $108 billion.
Fading credit card sales in the U.S. were was offset by a surge in spending with both types of cards worldwide. Credit and charge card purchases jumped 9 percent globally to $317 billion. Debit card use shot up 29 percent to $128 billion.
Overall, spending with MasterCard branded cards rose 8 percent to $685 billion.
Weak spending in the U.S. reflects the ongoing skittishness of consumers who are worried about jobs, even though MasterCard struck new deals with several banks that boosted the number of cards in use bearing the MasterCard logo to 1.6 billion.
The deals, particularly with Sovereign Bank and Chevy Chase Bank, recently bought by Capital One, are part of MasterCard's push into the debit card network. It still lags behind rival Visa Inc.
Debit has overtaken credit in both the number of purchases and dollar spent on the cards in the past few years, picking up steam as consumers have tried to reduce debt amid economic uncertainty.
MasterCard, based in Purchase, N.Y., said deals the with banks for new and renewed agreements to distribute its cards offset gains from price increases for processing transactions.
In premarket electronic trading, Mastercard shares leaped $9, or 3.8 percent, to $247.99.