Master Card Credit Card (MA) beat expectations for second-quarter earnings early Thursday after its rival Visa (V) topped the fiscal third-quarter estimates late Tuesday. MasterCard shares and Visa shares rose.
Results come after American Express (AXP) last week smashed second-quarter earnings estimates, as payment volumes rose in the US amid the economic recovery.
Estimates: Analysts see earnings per share up 28% to $1.74 year-over-year. Revenue is expected to increase 31% to $4.37 billion, according to FactSet.
consequencesEarnings per share: $1.98 on revenue of $4.5 billion. Total dollar volume increased 33%, on a local currency basis, to $1.9 trillion. Cross-border volume jumped by 58%. Transferred transactions grew 41%.
Discounts and incentives are up 53%, or 49% on a currency-neutral basis, due to growth in new and renewable transactions and deals.
Inventory: MasterCard stock rose 1.4% to close at 388.81 on the stock exchange today. The moving average stock is approaching 401.60 buying points from the base of the cup. Its relative strength line is moving. Mastercard’s RS rating is 60 and its EPS rating is 65.
Mastercard on Tuesday announced a new global Start Path program dedicated to supporting fast-growing digital assets, blockchain and cryptocurrency companies.
Seven startups have joined the programme, including Singapore-based Mintable, a non-fungible token (NFT) marketplace where users can create, buy and sell blockchain-backed digital and physical assets such as digital collectibles, groundbreaking artwork and music.
Visa earnings, stock visa
Estimates: FactSet agrees EPS will grow 26% from last year’s quarter to $1.34. Sales are expected to rise 26% to $5.86 billion.
consequencesEarnings per share: $1.49 on sales of $6.13 billion. Services revenue increased 17% to $2.8 billion. Data processing revenue rose 32% to $3.3 billion. Revenue from international transactions grew 54% to $1.7 billion. Customer incentives rose to $2.1 billion from $1.5 billion a year ago and $2 billion in the prior quarter.
Payments volume increased 34% on a constant dollar basis, accelerating from the previous quarter’s growth of 11%. Cross-border trading volume excluding intra-European transactions jumped 53%. Total processed transactions increased 39% to 42.6 billion, led by domestic transactions.
In a statement, CEO Alfred Kelly attributed the gains to major economies in the “re-opening-driven recovery.”
“This was best demonstrated by credit and direct spending rebounding while discount volumes and e-commerce remained strong from the accelerated monetary digitization sparked by the pandemic. In addition, spending on cross-border travel has improved with higher vaccination rates and the opening of more borders,” he said. .
On July 13, Visa announced that it is cooperating with a payment processor Global Payments (GPN) and Desjardins, North America’s leading financial cooperative, to offer visa installments to participating Canadian merchants and eligible credit card holders. Visa stock rose on the announcement.
Visa Installments is a new option to convert eligible purchases into smaller, equal payments made over a specified period of time using an eligible credit card. Canadian merchants will be among the first globally to enjoy the benefits of visa installments.
On July 6, Visa teamed up with fintech firm BlockFi to launch a 2% Bitcoin rewards credit card for US residents.
Inventory: Visa stock rose 0.4% to 247.92 Thursday. The stock is up nearly 5% above the buy point of 237.60 from a flat base, making the stock an extension, according to MarketSmith chart analysis. Visa’s relative strength line is trending upwards. Its RS rating is 71 out of a possible 99, while its EPS rating is 68.
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