Mastercard's expense forecast eclipses fourth-quarter profit beat

Mastercard projected annual costs ahead of analysts' expectations on Wednesday after the payments processor beat holiday quarter profit estimates on resilient spending.

The company said it expects adjusted operating expenses to climb in the "low-end of low-double-digit" percentage range in 2024. Analysts had expected a growth of 8.96%, according to LSEG data.
 

The forecast follows a 10% jump in fourth-quarter adjusted operating expenses to $2.9 billion, largely due to personnel costs.
 

Thanks to their strong performance over the last year, card firms have largely avoided the extent of layoffs that many companies in corporate America have had to undertake.
 

Excluding one-time costs, Mastercard's profit of $3.18 per share beat estimate of $3.08, according to LSEG data.
 

Customers have been spending on big-ticket purchases and traveling amid hopes of a "soft landing" for the U.S. economy, easing expectations over inflation and bets of interest rate cuts by the Federal Reserve.
 

A survey by the University of Michigan showed that US consumer sentiment hit its highest level in 2-1/2 years in January.
 

Gross dollar volume, the dollar value of all transactions processed on Mastercard's platform, climbed 10%.
 

Cross-border volume, a gauge of travel demand that tracks spending on cards outside the country of their issue, jumped 18%.

Net revenue rose 13% to $6.5 billion.
 

Last week, Visa also reported a better-than-expected quarterly profit, thanks to a strong holiday season.