) first-quarter 2013 operating earnings per share of $6.23
comfortably surpassed the Zacks Consensus Estimate of $6.19.
Results significantly beat the year-ago quarter's earnings of
$5.36 as well.
Net income for the reported quarter stood at $766 million, up
12.3% from $682 million in the prior-year quarter. No special
items were recorded in the reported quarter.
The better-than-expected results were largely due to the
outcome of better pricing, increased number of processed
transactions, strong gross dollar value (GDV) growth and marginal
growth in tax rate, which further led to higher-than-expected
operating cash flow. Modest growth in operating expenses also
supported the margins' upside.
Total revenue grew 8.4% year over year to $1.91 billion,
although it marginally lagged the Zacks Consensus Estimate of
$1.93 billion. On a constant currency basis, net revenue
increased 9%. The upside was primarily due to a 12% jump in the
number of processed transactions to 8.7 billion along with a 16%
increase in cross-border volumes.
During the reported quarter, GDV increased 12% to $947
billion, while worldwide purchase volume rose 10% year over year,
on a constant currency basis, to $690 billion. As of Mar 31,
2013, MasterCard had issued 1.9 billion MasterCard-and
Total operating expenses climbed 5.4% year over year to $799
million. The overall increase primarily resulted from a 14.8%
year-over-year upsurge in depreciation and amortization expenses
along with a 5% uptick in general and administrative expenses.
Moreover, advertising and marketing expenses climbed 3.2% year
over year to $129 million.
Subsequently, operating income increased 10.7% year over year
to $1.11 billion in the reported quarter. Likewise, operating
margin rose to 58.1% from 56.9% in the year-ago quarter.
MasterCard's effective tax rate for the reported quarter was
30.5%, lower than 31.8% in the year-ago period.
As of Mar 31, 2013, MasterCard's net operating cash flow
significantly escalated 104.2% year over year to $872 million. At
the end of Mar 2013, cash and cash equivalents slightly reduced
to $1.98 billion from $2.05 billion at 2012-end, while long-term
debt remained nil.
Meanwhile, retained earnings increased to $8.05 billion at the
end of Mar 2013 from $7.35 billion at 2012-end. However, total
equity dipped to $6.76 billion from $6.93 billion as of Dec 31,
Share Repurchase Update
On Feb 5, 2013, the board approved a new share repurchase
program worth $2.0 billion, which has now become effective.
Accordingly, during the reported quarter, MasterCard
repurchased about 1.48 million shares for $766 million. This
completed the previous $1.5 billion stock buyback program
announced in Jun 2012. Until Apr-end, MasterCard has bought back
an additional 341,500 shares for approximately $182 million since
the first quarter of 2013.
Till date, about $1.7 million of stock remains available under
the latest $2.0 billion share repurchase program
On Feb 5, 2013, the board of MasterCard declared 100% hike in
its regular quarterly dividend of 30 cents per share to 60 cents
a share. The increased dividend will be payable on May 9, 2013 to
shareholders of record as on Apr 9, 2013.
On Feb 8, 2013, MasterCard paid a regular cash dividend of 30
cents per share, announced in Dec 2012, to shareholders of its
Class A common stock and Class B common stock as on Jan 9,
On Tuesday, MasterCard's peer -
) - a Zacks Rank #2 (Buy) stock - reported first-quarter 2013
operating earnings of $1.33 per share, in line with the Zacks
Consensus Estimate and 13% higher than the year-ago quarter's
earnings of $1.18 per share. Results benefited from higher top
line growth, partially offset by higher operating expenses.
Another payment processor rival
) is slated to release its results today after the closing bell.
Both MasterCard and Visa carry a Zacks Rank #3 (Hold).
FISERV INC (FISV): Free Stock Analysis Report
MASTERCARD INC (MA): Free Stock Analysis
VISA INC-A (V): Free Stock Analysis Report
To read this article on Zacks.com click here.