MasterCard Charges Ahead With Double-Digit Transaction Volume Growth in Q3

The words "Charge it!" are apparently becoming more common domestically and around the globe with payment processing facilitator MasterCard (NYSE: MA  ) handily thumping Wall Street's expectations with the release of its third-quarter earnings results this morning.

For the quarter, MasterCard reported an increase in revenue of 16% to $2.22 billion from the prio- year period while net income rose 14% to $879 million and adjusted EPS jumped 18% to $7.27. By comparison, the consensus on the Street was for $2.14 billion in revenue and $6.94 in EPS.

Double-digit transaction volume growth was witnessed in all markets with the exception of the U.S. and Canada, which delivered gains of 9.2% and 9.6%, respectively. Cross-country processed transactions volume (i.e., everything outside the United States) increased 19%, aided most by Latin America and its Asia Pacific-Middle East region which produced 23.6% and 21% growth. This figure is important because MasterCard CFO Martina Hund-Mejean has previously noted that 85% of global transactions are still done in cash, so overseas markets represent MasterCard's biggest growth opportunity.

Gross dollar volume (GDV) processed through its network also rose 15% to $1.05 trillion from the previous year. Surprisingly, if you include currency effects, Europe with its numerous ongoing austerity measures was the biggest source of growth here with an 18.8% increase in GDV from the previous year.

It should also be noted that MasterCard's debit-card program has remained a big reason why it's able to deliver double-digit revenue and income increases. Outside the U.S., GDV for debit cards grew 21.9% in U.S. dollars with purchasing volume up 21.9% as well. In the U.S. purchase volume growth with debit cards was a bit more subdued, but still improved by 11.6%.

Finally, the company announced the repurchase of $345 million worth of shares during the quarter and notes it still has $912 million remaining under its current share repurchase agreement.


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9/29/2016 4:00 PM
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