By Samantha Sharf, Forbes Staff
To celebrate superstar Justin Timberlake’s birthday last week MasterCard gave some cardholders “Priceless Surprises” including free cupcakes and even a visit from the man himself. Today MasterCard announced a less welcome surprise when it reported somewhat weaker than expected fourth quarter earnings results.
MasterCard MA -5.12% reported a 13% increase in full year net revenue to $8.3 billion. Net income came in at $3.1 billion, including litigation charges. Like revenue, net income was somewhat short of expectations. The payment company’s $2.56 in earnings per share, including the special item, was 8-cents short of Wall Street analysts’ consensus estimate.
For the fourth quarter, the company reported an 11% increase in net revenue to $2.1 billion. The company says revenue gains were driven by a 14% increase in gross dollar volume to $1.1 trillion, an 18% increase in cross-border volume and a 13% increase in transactions processed. MasterCard customers complete 10.4 billion transaction during the quarter.
An increase in rebates and incentives partially offset the revenue gains. Fourth quarter net income was $623 million and earnings per share were 52-cents, both including a $61 million after-tax charge related to opt-outs in U.S. merchant litigation.
Stock futures were dropping across the board Friday morning, but following the report MasterCard’s share price was hit particularly hard. Shares were down close to 6% to $75 in morning trading. Competitor credit card stocks were also down. Visa which reported better than expected 2013 earnings results Thursday but ended the trading day down, was down about 1.4% in to $217.70. American Express AXP -1.85% shares were also down 1.4% to $85.40.
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