Mastercard says spending stabilising as profit beats estimates

Mastercard said it would temporarily suspend its 2020 share repurchase.. — Reuters pic
Mastercard said it would temporarily suspend its 2020 share repurchase.. — Reuters pic

NEW YORK, April 29 — Mastercard Inc reported better-than-expected first-quarter earnings and the payment processor said it has started seeing early signs of spending levels stabilizing, even as the novel coronavirus outbreak wreaked havoc on consumer spending.

Shares of the world’s second-largest payment processor were up 5.27 per cent at US$278.80 (RM1,211)before the bell.

Net income fell to US$1.7 billion, or US$1.68 per share, in the first quarter from US$1.9 billion, or US$1.80 per share, a year earlier, hurt by a rise in losses on equity investments and other costs.

On an adjusted basis it earned US$1.83 per share, beating analysts’ estimates of US$1.73 per share according to Refinitiv IBES.

The novel coronavirus pandemic has shutdown large parts of the global retail industry as stores remain shut and shoppers stay at home to avoid catching the highly contagious illness.

The outbreak has also hammered the global economy, pushing companies to layoff employees by the millions. That, in turn, could weigh on credit card issuers as more people default on their payments.

Mastercard also said it would temporarily suspend its 2020 share repurchase.

Rival credit card issuer American Express Co said last week it would cut spending by nearly US$3 billion in 2020 after its quarterly profit sank 76 per cent as it set aside more money to brace itself against a wave of potential delinquencies.

Mastercard’s quarterly revenue rose to US$4 billion from US$3.9 billion a year earlier.

Gross dollar volume, the dollar value of transactions processed, rose to US$1.6 trillion on a local currency basis, while cross-border volumes fell 1 per cent. — Reuters 

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