Mastercard profit tops estimates as lower costs soften spending hit

Mastercard Inc's quarterly profit beat Wall Street estimates, as lower costs helped dull the blow from fewer people using the payment processor's cards during the Covid-19 pandemic

(Reuters) - Mastercard Inc's quarterly profit beat Wall Street estimates on Thursday, as lower costs helped dull the blow from fewer people using the payment processor's cards during the COVID-19 pandemic.

The pandemic has hit large parts of the global retail industry as stores remain shut and shoppers stay at home to avoid catching the highly contagious illness.

Travel bans around the world have taken a toll on payment processors, with Mastercard reporting a 45% drop in cross-border volume on a local currency basis in the quarter.

Gross dollar volume - the dollar value of transactions processed - fell 10% to $1.4 trillion.

Net income fell about 31% to $1.42 billion in the second quarter ended June 30. Excluding items, profit was $1.36 per share, beating estimates of $1.16, according to IBES data from Refinitiv.

Mastercard's shares rose 1.41% in premarket trade.

Total operating expenses fell 5% to $1.6 billion in the quarter.

Rival Visa Inc's results also topped analysts' estimates on Tuesday as lower-than-expected expenses helped protect against lower consumer spending due to a coronavirus-driven surge in unemployment.

The U.S. government reported earlier this month that retail sales rebounded in May and June from a sharp drop in April, and ended down 8% for the quarter from a year earlier.

 

(Reporting by Noor Zainab Hussain in Bengaluru and David Henry in New York; Editing by Devika Syamnath)