MasterCard Inc. (MA - Analyst Report) reported first-quarter 2015 operating earnings per share (EPS) of 91 cents, which comfortably exceeded both the Zacks Consensus Estimate of 80 cents and the year-ago quarter figure of 73 cents. The company has, therefore, kept its earnings streak alive in all the trailing four quarters with an average beat of 9.2%.
Mastercard Inc. - Earnings Surprise | FindTheCompany
Including the dilutive impact from acquisition of 2 cents per share, net income came in at 89 cents, up 21.9% year over year.
Results reflected an improved top line on increased number of processed transactions and strong gross dollar value (GDV) growth during the reported quarter, along with a lower tax rate.
Net revenue grew 3% year over year and 8% on a constant currency basis to $2.23 billion, marginally missing the Zacks Consensus Estimate of $2.29 billion. Acquisitions in the quarter accounted for 2% of total revenue growth.
The upside was primarily driven by a 12% rise in the number of processed transactions to 11.0 billion along with a 19% increase in cross-border volumes. These were partially offset by higher rebates and incentives, primarily attributable to new and renewed business alliances.
During the reported quarter, the GDV increased 12% to $1.1 trillion, while worldwide purchase volume rose 12% year over year – on a constant currency basis – to $783 billion. As of Mar 31, 2015, MasterCard issued over 2.2 billion MasterCard and Maestro-branded cards.
Total operating expenses declined 1% year over year to $879 million. Foreign exchange gains as well as the ongoing cost management initiatives undertaken by the company helped moderate overall expenses.
Operating income was up 5% year over year to $1.35 billion in the reported quarter. Interest expenses rose to $17 million as against $6 million in the prior-year quarter.
Financial Update
During the quarter, MasterCard’s net operating cash flow increased 60.3% year over year to $911 million.
As of Mar 31, 2015, cash and cash equivalents declined to $4.2 billion from $5.1 billion at year-end 2014. Long-term debt totaled $1.49 billion, in line with the year-end 2014 figure.
Meanwhile, retained earnings were $14.0 billion, up from $13.2 billion at year-end 2014. Total equity declined to $6.33 billion from $6.82 billion at Dec 2014.
Share Repurchase Update
During the reported quarter, MasterCard repurchased 11 million shares worth $947 million. Subsequent to the first quarter, through Apr 22, the company repurchased another 2.7 million shares worth $240 million. The company is now left with $2.8 billion remaining under its authorization
Zacks Rank
MasterCard currently carries a Zacks Rank #3 (Hold).
Peers
Earlier this month, American Express Company (AXP - Analyst Report) or AmEx reported first-quarter 2015 operating EPS of $1.48, comfortably beating the Zacks Consensus Estimate by about 8%.
On Apr 22, Discover Financial Services (DFS - Analyst Report) reported EPS of $1.28 that beat the Zacks Consensus Estimate of $1.26 but decreased 2.3% from the year-ago quarter.
Visa Inc. (V - Analyst Report) is scheduled to release first-quarter earnings on Apr 30, 2015.
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