MasterCard Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component MasterCard (NYSE:MA) will unveil its latest earnings tomorrow, Thursday, January 31, 2013. Mastercard is a multinational company whose principal business is to process payments and to provide related services to financial institutions and other customers. Its main services are in support of the credit, debit, prepaid, and related payment programs.

MasterCard Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of $4.79 per share, a rise of 18.9% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $4.93. Between one and three months ago, the average estimate moved down. It has risen from $4.78 during the last month. Analysts are projecting profit to rise by 17.6% compared to last year’s $21.99.

Past Earnings Performance: Last quarter, the company beat estimates by 24 cents, coming in at profit of $6.17 a share versus the estimate of net income of $5.93 a share. It marked the fourth straight quarter of beating estimates.

Start 2013 better than ever by saving time and making money with your Limited Time Offer for our highly-acclaimed Stock Picker Newsletter. Click here for our fresh Feature Stock Pick now!

Wall St. Revenue Expectations: Analysts are projecting a rise of 9.2% in revenue from the year-earlier quarter to $1.89 billion.

A Look Back: In the third quarter, profit rose 7.7% to $772 million ($6.17 a share) from $717 million ($5.63 a share) the year earlier, exceeding analyst expectations. Revenue rose 5.5% to $1.92 billion from $1.82 billion.

Here’s how MasterCard traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

ma

Analyst Ratings: With 23 analysts rating the stock a buy, one rating it a sell and five rating the stock a hold, there are indications of a bullish stance by analysts.

Key Stats:

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 21.4% in the first quarter and 15.1% in the second quarter before increasing again in the third quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 20.2% in the fourth quarter of the last fiscal year, 17.1% in the first quarter and 9.2% in the second quarter before increasing again in the third quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.99 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.92 in the second quarter to the last quarter driven in part by an increase in current assets. Current assets increased 9.5% to $9.07 billion while liabilities rose by 5.6% to $4.55 billion.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.

(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)