MasterCard profit jumps 33%

MasterCard Inc, the world’s second-biggest payments network, climbed the most in five weeks in New York trading after second-quarter profit beat analysts’ estimates, helped by an increase in customers’ spending.

The stock gained 8.5 per cent to $323.85 at 12.27 pm on the New York Stock Exchange, the biggest jump since June 29 and the highest since the company’s initial public offering in May 2006. Net income rose 33 per cent to $608 million from the same period a year earlier, the Purchase, New York-based firm said on Wednesday in a statement. Earnings per share of $4.76 exceeded the $4.23 average estimate of 29 analysts surveyed by Bloomberg as net revenue increased 22 per cent to $1.7 billion.

 

MasterCard, led by CEO Ajay Banga, aims to gain a bigger share of the US debit market as new rules on transaction fees and processing threaten to erode the dominance of larger rival Visa Inc. Banga, 51, is also expanding MasterCard’s presence in emerging markets through acquisitions as US consumer spending stagnates amid rising unemployment.

“Solid global performance, including strong increases in volume and processed transactions, fuelled double-digit revenue growth this quarter,” Banga said in the statement.

MasterCard’s US debit-card spending surged 19 per cent to $98 billion from last year’s second quarter.