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Mastercard Stock Falls 1.8% Despite Convincing Q1 Beats

By Eric Volkman - Apr 29, 2021 at 7:34PM

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The company managed to lift its revenue for the period, although its adjusted net profit was lower.

Mastercard (MA 1.05%) released its first-quarter results Thursday. The familiar payment card company's net revenue was $4.16 billion, 4% higher than the same period a year ago. That was backed by gross dollar volume that rose 8%, and purchase volume that edged into the double digits with a 10% rise.

Mastercard's adjusted net income, however, went in the opposite direction. It sank by 6% to $1.7 billion, or $1.74 per share.

 

Payment card being used for a point-of-sale transaction.

Image source: Getty Images.

Both headline figures beat analyst estimates, particularly the bottom-line result. On average, prognosticators following the stock were estimating the company would report $3.99 billion in revenue and only $1.57 in adjusted-per-share net profit.

As with archrival Visa, Mastercard's encouraging growth was tempered somewhat by a notable decline in cross-border transactions -- the volume of which cratered by 17% on a local-currency basis. Generally speaking, though, the company has done a good job growing its business, both organically and through acquisitions, in the challenging times we're all enduring.

"We started the year with good momentum, delivering positive net revenue growth this quarter, and are encouraged by the return of domestic spending levels to pre-pandemic trends," Mastercard quoted its CEO Michael Miebach as saying.

Despite that positive pronouncement, the company did not proffer guidance for either the current quarter or full-year 2021.

On Thursday, in contrast to the 0.7% increase in the S&P 500 index, Mastercard fell by 1.7%.

It's hard to tease out what disappointed investors about the quarter. Mastercard actually did well relative to other blue chip companies in the thick of the pandemic, so perhaps it's considered to be a coronavirus stock. These days, many are eager to get away from this grouping in favor of companies seemingly better poised to take advantage of the global economic recovery.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Mastercard. The Motley Fool has a disclosure policy.

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