MasterCard, Visa Earnings Trump Forecasts

However, both stocks head lower after the news


Credit card giants MasterCard (NYSE:MA) and Visa (NYSE:V) both reported quarterly earnings Wednesday that exceeded Wall Street’s expectations.

The good news didn’t impress investors, however. MA shares had slipped about 1% Wednesday after releasing its results, and V shares were down about 3% in after-hours trading.

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MasterCard reported profits of $682 million ($5.36 per share), about 25% better than last year’s results of $562 million ($4.29 per share). Revenues of $1.8 billion were up about 17% from a year ago.

“We had a good start to the year with solid first-quarter results driven by an increase in processed transactions, the highest quarterly growth rate since our IPO, as well as positive volume growth in all regions as consumers continue to adopt electronic payments,” Ajay Banga, MasterCard president and chief executive officer said in a press release.

The company said card payments grew 14% in the U.S. and 20.6% internationally.

However, dissuading MA investors was management’s conference-call warning that such strong earnings probably won’t continue throughout this year.

Visa posted profits of about $1.3 billion ($1.91 per share), which is about 23% higher than last year’s results of $881 million ($1.23 per share). Revenues for Visa of $2.6 billion was up 15% from last year’s $2.3 billion. The company’s adjusted earnings, which came in at $1.60 per share, beat the $1.51 estimate from analysts.

“Our strong financial performance this quarter was fueled by continued growth of U.S. credit products, strong cross-border spending and expansion of Visa’s core business in international markets,” Joseph Saunders,Visa’s chairman and chief executive officer said in a press release.

Visa also increased its 2012 profit predictions. The company expects to see annual growth in the “high teens to low twenties.”

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