MasterCard Profit Climbs as Card Spending Increases (Correct)
(Corrects spelling of Banga in fourth paragraph.)
Nov. 2 (Bloomberg) -- MasterCard Inc., the world's second- biggest payments network, posted a third-quarter profit that beat analysts' estimates as consumers increased spending with credit and debit cards.
Net income climbed 38 percent to $717 million, or $5.63 a share, from $518 million, or $3.94, a year earlier, the Purchase, New York-based company said today in a statement. The average estimate of 29 analysts surveyed by Bloomberg was $4.82 a share.
Chief Executive Officer Ajay Banga, 51, is pushing to wrest market share from larger rival Visa Inc. amid new U.S. regulations on so-called swipe fees, or interchange, charged to merchants for debit-card purchases. The rules also give retailers more say on how those transactions are processed, or routed, which may erode Visa's dominance.
"We are pleased with our strong results this quarter, which were driven by several factors, including double-digit increases in volumes and processed transactions in most regions across the globe," Banga said in the statement.
MasterCard declined $12.94, or 3.7 percent, to close at $334.30 yesterday in New York. It has gained 49 percent this year and is the top performer the 75-company Standard & Poor's 500 Information Technology Index. San Francisco-based Visa, which ranks fifth, has gained 28 percent.
"We still prefer MasterCard to Visa as we believe MasterCard has more to gain than lose from debit interchange regulation and will exhibit better growth characteristics over the next 12 months," Tien-Tsin Huang, an analyst at JPMorgan Chase & Co., said in an Oct. 21 note to clients. He has an "overweight" rating on MasterCard.
Visa said last week that quarterly profit rose 14 percent to $880 million, or $1.27 a share, as credit-card spending climbed faster than debit and affluent consumers stepped up purchases.
To contact the reporters on this story: Donal Griffin in New York at dgriffin10@bloomberg.net
To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net .
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