MasterCard: Beats Analyst Estimates, Priceless

It has been a blowout year for card companies, which have seen earnings rise supported by growth in consumer spending in the US and abroad. MasterCard Inc. (MA) is no exception: The world’s second-largest card payment processing company beat analysts’ estimates for its third quarter (3QFY13) earnings and revenues by a fair margin.

For the quarter ending September 30, 2013, MasterCard’s net income grew to $879 million, with earnings (diluted) up 18% from the same quarter last year to $7.27 per share. The result beat analysts’ mean estimates by a healthy 4.5%.

The company’s net revenues for the quarter came in at $2.218 billion, up 16% from 3QFY12, driven mainly by increased payment volumes and transactions on the MasterCard, Maestro and Cirrus networks (all three are operated by MasterCard). Reported revenues were 4% better than consensus estimates of $2.133 billion. Operating income for the quarter was also 17% higher at $1.24 billion, with operating margins touching 56%.

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MasterCard Announces Stock Split, Increases Dividends

MasterCard Inc. (MA), the country’s second largest payment processing company, announced yesterday, a 10-for-1 stock split and all investors who own company stock on January 9, 2014 will receive nine additional shares for each one they own. The company’s total outstanding shares on the NYSE would increase from 120 million to 1.2 billion and the stock price will readjust to under $80.

The company also announced an 83% increase in its quarterly dividend and a share buyback program worth $3.5 billion. MasterCard stock price jumped 4.8% after-hours trading to reach $800.

The stock split will effectively result in the company’s shares becoming more attractive for retail investors, making them affordable to those looking to buy individual shares in the company.

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