Mastercard Inc (MA) Stock Rallies On Strong Earnings Results

Mastercard Inc (MA)
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Mastercard Inc (MA) released its Q4 2017 earnings results before opening bell this morning. On an adjusted basis, Mastercard Inc (MA) earnings amounted to $1.14 per share on $3.3 billion in revenue, compared to the consensus estimates of $1.12 per share on $3.25 billion in revenue. In Q4 2016, the credit card company reported $2.8 billion in revenue and 86 cents per share in adjusted earnings.

Mastercard earnings reveal solid growth

On a GAAP basis, Mastercard Inc (MA)  earnings per share fell to 21 cents from 86 cents per share in the year-ago quarter. The company said that Q4 2017 included 92 cents per share in special items, most of which are related to the tax reform bill.

Gross dollar volume increased 13% year over year in local currencies to reach $1.4 trillion, while purchase volume grew 13%. Switched transactions grew 17% to 17.7 billion, while cross-border volumes also increased 17% in local currencies.

Mastercard acquisitions are paying off

Mastercard Inc (MA) also said acquisitions contributed 3 percentage points to its growth, especially the Vocalink acquisition. Rebates and incentives partially offset those increases. The firm’s customers had issued 2.4 billion Mastercard Inc (MA)  and Maestro-branded cards as of the end of Q4 2017.

“We’re pleased to have finished 2017 with strong results for the quarter and full year, driven by the solid execution of our strategy,” President and Chief Executive Officer Ajay Banga said in a statement on the Q4 2017 Mastercard Inc (MA) earnings results. “Our ongoing investments in digital and safety and security, combined with our recent acquisitions, position us well to continue to grow our core business and capture new payment flows.”

In all of 2017, the credit card company repurchased about 30 million shares for a total of $3.8 billion. It also paid dividends amounting to $942 million in all of 2017.

Following the Q4 2017 Mastercard Inc (MA) earnings release, the credit card company’s stock rallied by more than 3% in premarket trades, climbing as high as $174.28 ahead of the bell.