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Mastercard Earnings Top After Visa Guidance Disappoints

Mastercard Earnings Top After Visa Guidance Disappoints
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Master Card Credit Card (MA) beat its third-quarter earnings estimates early Thursday, following the rival payments giant Visa (V) Fiscal fourth-quarter earnings topped the list Tuesday night, but projected slower-than-expected growth in 2022. Visa and Mastercard stock fell modestly Thursday after falling on Wednesday.


MasterCard Earnings

Estimates: Analysts expected MasterCard earnings per share to come in at $2.19, up 37% from a year ago. Sales were seen coming in at $4.95 billion, an increase of 29% year over year.

consequencesEarnings per share for Mastercard rose to $2.37 per share, with revenue up 30% to $5 billion.

Chief Executive Officer Michael Maybach said in a statement that Mastercard’s performance was driven by “healthy domestic spending and strong growth in cross-border spending that has recently returned to pre-pandemic levels.”

“We are expanding the reach and strength of our trusted network through innovations such as the new Mastercard Premium Program,” he added. “We continue to add to our efforts in cryptocurrency services and open banking with the acquisition of CipherTrace and the planned acquisition of Aiia.”

The total dollar volume grew by 20%, based on the local currency, to $2 trillion. Cross-border trading volume inflated 52% based on local currency. Transfers (authorization, clearing and settlement) achieved 25%.

Last month, Mastercard announced that it was also in the process of launching a BNPL program in US dubbed Mastercard installments, and is set to roll out in other markets in the future.

Mastercard stock closed 0.7% lower at 333.27, paring modest gains in the stock market today. Shares are up 3% in pre-market trading. Mastercard stock fell just over 6% on Wednesday. Its relative strength line is receding. Mastercard’s RS rating is just 23, while its EPS rating is 79.

Visa earnings

estimatesFactSet analysts expected Visa to report earnings of $1.55 per share in the fourth fiscal quarter, up 38% from the previous quarter. Full-year earnings per share were seen rising 15% to $5.81.

Revenue for the quarter saw 28% year-over-year growth to $6.52 billion, to $24.06 billion year-over-year, a 10% year-over-year increase.

consequences: Visa reported earnings of $1.62 per share, an increase of 45% over the previous quarter last year, on sales of $6.6 billion, an increase of 29%. Earnings per share were $5.91 for the year, while revenue rose 10% to $24.1 billion.

“Our performance was driven by the continued recovery in many global economies and the increased diversification of our revenue through new flows and value-added services,” said Visa CEO Alfred Kelly. “Looking ahead, Visa is better positioned for the future as cross-border travel recovers as we continue to drive the rapid growth of digital payments and enable innovation in the movement of money globally.”

Payments volume grew 17% for the quarter and 16% for the full year of 2021. Cross-border payments volume increased 38% in the fourth quarter and 9% for the year. Processed transactions increased 21% for the third quarter and 17% for the full year.

prospects: Visa sees revenue growth in 2022 at ‘maximum mid-teens’. Analysts had targeted 20% growth.

In July, the Dow Jones ventured into the buy now, pay later business, following in the footsteps of the Dow Jones Industrial Average. PayPal (PYPL) and many others. The program is called Visa Installment Solution. But unlike PayPal and other BNPL providers, which screen consumers for creditworthiness, Visa will not conduct a risk assessment on extending installment loans to credit card issuers.

Visa also covered its toe in NFTs. In August, it bought CyberPunk, a non-fungible token for digital artwork, for about $150,000 in Ethereum.

Stock Visa

Visa shares fell 2.7 percent to 209.99. On Wednesday, Visa stock fell 6.9%. The stock is in a flat base with a buy point at 252.77, according to MarketSmith, but has trimmed its lowest base and hit a six-month low.

Visa’s relative strength line is trending downward. The RS rating is 32 out of a possible 99, while the EPS rating is 88.

Among the other payments stock Square (SQ) stock rose 3.2% Thursday, after falling 3.9% Wednesday. Square enters the BNPL market with a pending $29 billion acquisition of AfterPay.

PayPal stock closed 0.8% higher at 236.83 Thursday, after falling 3.2% on Wednesday. PayPal rose modestly on Monday after saying it would not buy Pinterest (pins). PYPL stock fell 10% last week amid the PINS acquisition hype.

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