Mastecard scores a profit beat but its stock falls as spending growth slows

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Mastercard reported fourth-quarter earnings Wednesday morning.

The company posted fourth-quarter net income of $2.8 billion, or $2.97 a share, compared with $2.5 billion, or $2.62 a share, in the year-earlier period.

On an adjusted basis, Mastercard
MA,
+1.05%

earned $3.18 a share, whereas it earned $2.65 a share on the metric a year before. Analysts were looking for $3.08 a share.

Mastercard’s revenue increased to $6.5 billion from $5.8 billion and matched the FactSet consensus view.

The company saw a 10% increase in fourth-quarter gross dollar volume, along with an 18% increase in cross-border volume, which represents transactions between merchants and customers based in different countries from one another. Switched transactions rose 12%.

Chief Executive Michael Miebach called out “healthy consumer spending” in Mastercard’s earnings release.

He also highlighted recent business wins.

“In the fourth quarter, we signed the third U.S. regulated bank debit portfolio flip to our network within the last 12 months,” Miebach said. “This is just one illustration of our deal momentum.”

Mastercard’s earnings come after rival Visa Inc.
V,
+1.28%

beat with its own results last week but spooked Wall Street a bit by showing a slowdown in some volume metrics during the December quarter and into January. Visa’s management called out weather-related impacts to U.S. numbers in January.

See more: Visa posts earnings beat, but here’s why Wall Street says the stock is falling

Mastercard also slowed some slowdown, with overall switched volume growth of 11% in the fourth quarter down from the 14% growth seen in the third quarter. For the first four weeks of January, the growth was 10%.

While cross-border volume growth of 18% in the fourth quarter was down from 21% growth in the third quarter, it remained constant at 18% for the first four weeks of January.

For the first quarter, Mastercard expects revenue growth at the “low end of low double digits.” Analysts were modeling $6.4 billion in revenue, which would be up 12% from a year before.

Don’t miss: Amex’s stock soars to record as affluent spenders drive growth



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