(RTTNews.com) - Payment card processor Mastercard Inc. ( MA ) on Wednesday reported a 38 percent increase in profit for the first quarter from last year on strong revenue growth that reflected increases in switched transactions as well as gross dollar volume.
Both revenue and adjusted earnings per share for the quarter beat analysts' estimates. Mastercard's shares are rising more than 4 percent in pre-market activity.
The Purchase, New York-based company reported net income for the first quarter of $1.49 billion or $1.41 per share, up from $1.08 billion or $1.00 per share in the prior-year quarter.
The latest quarter's results include $0.05 per share related to litigation settlements with Pan-European merchants, $0.02 per share related to an increased reserve for the company's U.S. merchant opt-out cases, and $0.01 per share related to litigation settlements with U.K. merchants.
Adjusted earnings for the quarter were $1.50 per share, compared to $1.01 per share in the year-ago period.
On average, twenty nine analysts polled by Thomson Reuters expected the company to report earnings of $1.25 per share for the quarter. Analysts' estimates typically exclude one-time items.
Net revenues for the quarter rose 31 percent to $3.58 billion from $2.73 billion in the same quarter last year and beat analysts' consensus estimate of $3.25 billion. Adjusted for currency, net revenue increased 27 percent.
The company noted that new revenue recognition rules and acquisitions contributed 4 and 2.5 percentage points to this growth, respectively.
Excluding these items, underlying revenue growth was 20 percent. This reflected an increase in switched transactions of 17 percent, adjusted for the impact of the Venezuela deconsolidation, to 16.7 billion; an increase in cross-border volumes of 21 percent on a local currency basis, and a 14 percent increase in gross dollar volume, on a local currency basis.
Global purchase volumes grew 14.5 percent on a local currency basis from last year to $1.04 trillion. As of the end of the quarter, MasterCard said its customers had issued 2.4 billion MasterCard and Maestro-branded cards, adjusted for the impact of the Venezuela deconsolidation.
Total operating expenses for the quarter increased 43 percent to $1.76 billion.
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