MasterCard Inc. Earnings: Five Straight Quarters of Double-Digit Growth

S&P 500 (NYSE:SPY) component MasterCard Incorporated (NYSE:MA) reported higher profit for the fourth quarter as revenue showed growth. 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.

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MasterCard Incorporated Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for MasterCard Incorporated rose to $514 million ($4.03 per share) vs. $415 million ($3.16 per share) in the same quarter a year earlier. This marks a rise of 23.9% from the year earlier quarter.

Revenue: Rose 20.2% to $1.73 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: The company beat the mean estimate of $3.90 per share. Analysts were expecting revenue of $1.73 billion.

Quoting Management: “We are pleased with our strong fourth quarter results as we are seeing sustained momentum driven by new deals and the ongoing shift away from paper-based payments,” said Ajay Banga, MasterCard president and chief executive officer. “For the full year, despite ongoing economic uncertainties, we posted strong performance ahead of our long-term objectives. Solid execution at the local level continued to result in new business wins in 2011, with a recent agreement from KeyBank that includes PIN debit and our IPS platform, as well as credit and debit deals with nearly 150 U.S.-based independent banks and credit unions. Additionally, we continue to lay the foundation for growth through strategic partnerships with Western Union, Telefnica and Intel to provide consumers in developed and emerging markets with access to more efficient and safer forms of electronic payments.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 19%, with the biggest boost coming in the third quarter when revenue rose 27.3% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 38.4% and in the second quarter, the figure rose 32.8%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 82 cents in the third quarter, by 55 cents in the second quarter, and by 19 cents in the first quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from $5.22 a share to $5.18 over the last sixty days. Over the past three months, the average estimate for the fiscal year has climbed from $18.28 per to share to $18.57.

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

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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