MasterCard posts 33 percent profit increase
MasterCard debit and credit card spending was 12 percent higher in July than it was in the same month last year. About 2 percent of the increase in MasterCard spending came from buying gas.
U.S. shoppers kept on using their MasterCards in July even as uncertainty about the economy increased.Skip to next paragraph
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Spending with credit and debit cards bearing the company's logo rose about 12 percent in the U.S. compared with July 2010, Chief Financial Officer Martina Hund-Mejean of Mastercard Inc. said Wednesday.
About 2 points of that increase came from gas prices, which averaged about $1 per gallon higher than a year ago. Inflation also played a part in higher clothing and food costs, and more expensive luxury items due to record prices for gold and silver, she said.
Other increases came from expanding fees and surcharges that airlines charge, and increased spending in restaurants and hotels, the CFO said during an interview.
Spending was slowing down at this time a year ago.
Still, there is an apparent split in the consumer base.
"We have two types of consumers in the United States," Hund-Mejean said during a conference call to discuss the company's second-quarter results. Those people who have a job and expect to keep it "feel that they can go out and do the spending that they need to do," she said. "Then, on the other hand, you have the consumer who is not quite as well off, who is not able to do it like that."
The July data follows a strong quarter for MasterCard in which its profit rose 33 percent as card holders kept reaching for their plastic during the spring months.
The results beat Wall Street expectations, and its shares rose $39.98, or 13.4 percent, to close at $338.47, after earlier touching a 52-week high of $340.42.
The payment processing company said net income rose to $608 million, or $4.76 per share, for the three months ended June 30, up from $458 million, or $3.49 per share, in the year-ago quarter. The number of outstanding shares fell by more than 2 percent, which had the effect of increasing earnings per share.
Revenue rose 22 percent to $1.67 billion from $1.37 billion a year ago. Acquisitions contributed about 3 percentage points to revenue growth.
Analysts, on average, were expecting earnings of $4.22 per share on revenue of $1.55 billion, according to data provided by FactSet.
MasterCard said the number of transactions it handled rose 17 percent during the quarter. On a dollar basis, total transactions reached $811 billion, versus $656 billion last year
Both credit and debit card use rose around the world.