Mastercard Q3 Results Beat Estimates

(RTTNews) - Mastercard Inc. (MA) reported a profit for the third quarter of 2016 that increased about 21 percent from the year-ago period, while it was up 15% excluding a special item related to the termination of the U.S. employee pension plan taken in last year's third quarter.

Both earnings per share and revenue for the quarter beat analysts' expectations.

In the pre-market trade, Ma is currently trading at $105.51, up $1.91 or 1.84 percent.

Worldwide purchase volume for the third-quarter quarter was up 9% on a local currency basis, adjusting for the impact of recent EU regulatory changes, versus the third quarter of 2015, to $882 billion. As of September 30, 2016, the company's customers had issued 2.3 billion Mastercard and Maestro-branded cards.

Net Income for the third-quarter grew about 21 percent to $1.184 billion from last year's $977 million, with earnings per share improving to $1.08 from $0.86 in the prior year.

Adjusted net income rose to $1.18 billion or $1.08 per share from $1.03 billion or $0.91 per share in the previous year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.98 per share for the quarter. Analysts' estimates typically exclude special items. Net revenue for the third quarter of 2016 was $2.88 billion, a 14% increase versus the same period in 2015. Wall Street expected revenues of $2.75 billion. Net revenue growth was driven by the impact of certain items: an increase in processed transactions of 18%, to 14.5 billion; an increase in cross-border volumes of 12%; and an 11% increase in gross dollar volume, on a local currency basis and adjusting for the impact of recent EU regulatory changes, to $1.2 trillion. These factors were partially offset by an increase in rebates and incentives, primarily due to increased volumes and new and renewed agreements.

As a result of the June 2016 implementation of new EU regulations, the company no longer charges fees on domestic EEA co-badged volume and thus excludes that volume from its metrics. The impact on net revenue is de minimis.