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Mastercard Rebounds On Strong Report, Sunnier Cross-Border Outlook

Stock MarketsOct 28, 2021 13:04
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© Reuters. Mastercard Earnings, Revenue beat in Q3

Investing.com - Mastercard (NYSE:MA) rebounded after posting earnings that topped expectations on both the top line and bottom line, countering market concerns about a prolonged spending recovery. Shares are trading up 3% pre-market after selling off 6% yesterday in the wake of Visa Inc Class A (NYSE:V)'s earnings report.

Mastercard announced earnings per share of $2.37 on revenue of $4.99B, beating Investing.com analyst estimates of $2.18 and $4.95B. “Our performance was driven by the execution of our strategy, healthy domestic spending and solid growth in cross-border spending which has recently returned to pre-pandemic levels,” said Michael Miebach, Mastercard CEO, which ran counter to the view expressed by Visa that cross-border volume was still below pre-pandemic levels and would need until 2023 to get back to full levels.

Net revenue grew 30% on a year over year basis to $5B, while operating income grew 29%. The adjusted EPS of $2.37 was a 48% increase, with a lower effective tax rate aiding the company’s profitability. Cross-border revenue grew 52% year over year, another sign of the strong rebound in travel vs. 2020.

Mastercard ramped up their own share buyback spending, purchasing $1.6B worth of shares at an average price of $372 a share, and an additional $361M worth of shares at $361/share on average through the first three weeks of October. They still have $4.8B under the current share repurchase program.

Mastercard shares are down 3% year to date. Visa and Discover Financial Services (NYSE:DFS) are trading up about 1%, perhaps in relief from Mastercard’s numbers, with American Express Company (NYSE:AXP) and Capital One Financial Corporation (NYSE:COF) up half a percent pre-market.

Mastercard Rebounds On Strong Report, Sunnier Cross-Border Outlook
 

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