Mastercard profit tops Street on holiday shopping rush; shares hit record

(Reuters) - Mastercard Inc's quarterly profit topped estimates on Thursday, boosted by a busy holiday shopping period that saw more people swiping credit and debit cards for larger sums.

The company's shares rose as much as 4.4 percent to an all-time high of $176.52 in early trading.

Growth in the U.S. economy over the last quarter also helped the world's No. 2 payments network, which, like bigger rival Visa Inc largely banks on the health of the economy and customers' willingness to loosen purse strings in order to generate revenue from credit- and debit-card transactions.

U.S. consumer spending, which accounts for more than two-thirds of the country's economic activity, accelerated at a 3.8 percent annualized rate in the fourth quarter, the fastest in three years, as household incomes continued inching up.

Increase in household income bodes well for Mastercard and Visa since it means outstanding credit card bills, which accrue as credit card debts, get paid on time.

Outside the United States too Mastercard has a strong presence, and business in the fourth quarter grew: cross-border volumes - the value of transactions made by overseas cardholders - rose 22.4 percent on a U.S. dollar converted basis.

Gross dollar volume - the value of transactions processed - rose 15.4 percent to $1.42 trillion worldwide, as more people used credit, debit and commercial prepaid cards across Mastercard's global network.

Net income fell 76 percent to $227 million, or 21 cents per share, in the quarter ended Dec. 31, as the company booked $981 million in charges, primarily due to the U.S. tax reform. (http://mstr.cd/2nwXaUZ)

Excluding items, Mastercard earned $1.14 per share, beating the average analyst estimate of $1.12, according to Thomson Reuters I/B/E/S.

The company's net revenue jumped 20.2 percent to $3.31 billion.

Total operating expenses rose 28.5 percent to $1.79 billion, primarily due to the acquisition of payment processor Vocalink.

Visa reports its results on Thursday after markets close.

(Reporting By Aparajita Saxena in Bengaluru; Editing by Martina D'Couto and Maju Samuel)