MasterCard Incorporated Reports First-Quarter 2014 Financial Results
* First-quarter net income of $870 million, or $0.73 per diluted share
* First-quarter net revenue increase of 14%, to $2.2 billion
* First-quarter gross dollar volume up 14% and purchase volume up 13%
MasterCard Incorporated (NYSE: MA) today announced financial results for the first quarter of 2014. The company reported net income of $870 million, up 14%, and earnings per diluted share of $0.73, up 18%, in each case versus the year-ago period.
Net revenue for the first quarter of 2014 was $2.2 billion, a 14% increase versus the same period in 2013, both as-reported and adjusted for currency. Net revenue growth was driven by the impact of the following:
- A 14% increase in gross dollar volume, on a local currency basis, to $1.0 trillion;
- An increase in processed transactions of 14%, to 9.8 billion; and
- An increase in cross-border volumes of 17%.
These factors were partially offset by an increase in rebates and incentives, primarily due to new and renewed agreements and increased volumes.
Worldwide purchase volume during the quarter was up 13% on a local currency basis versus the first quarter of 2013, to $759 billion. As of March 31, 2014, the company’s customers had issued just over 2 billion MasterCard and Maestro-branded cards.
Commenting on the company’s performance, Ajay Banga, president and CEO of MasterCard, said, “We kicked off the year with a strong quarter, despite a mixed global economy. We secured several new agreements, including three of the largest retailers. Wal-Mart and Sam’s Club will flip their co-brand portfolios to MasterCard. Target will also shift its co-brand to MasterCard and use our chip and PIN technology across all of its card products as part of a commitment to provide its customers with the most secure payment product. At the same time, we continue to invest in technology and acquisitions that will speed our development of mobile and online solutions.”
Total operating expenses increased 12%, or 11% after adjusting for currency, to $892 million, during the first quarter of 2014 compared to the same period in 2013. The increase was primarily driven by higher investments, including acquisitions, to support strategic initiatives.
Operating income for the first quarter of 2014 increased 16% over the year-ago period and the company delivered an operating margin of 59.0%.
MasterCard’s effective tax rate was 32.0% in the first quarter of 2014, versus a rate of 30.5% in the comparable period in 2013. The increase was primarily due to a less favorable geographic mix of taxable earnings.
During the first quarter of 2014, MasterCard repurchased approximately 21.3 million shares of Class A common stock at a cost of approximately $1.7 billion. Quarter-to-date through April 24, the company repurchased an additional 6.2 million shares at a cost of approximately $453 million, with $1.5 billion remaining under the current repurchase program authorization.
First-Quarter Financial Results Conference Call Details
At 8:30 a.m. ET today, the company will host a conference call to discuss its first-quarter financial results.
The dial-in information for this call is 800-708-4540 (within the U.S.) and 847-619-6397 (outside the U.S.), and the passcode is 36946578. A replay of the call will be available for one week and can be accessed by dialing 888-843-7419 (within the U.S.) and 630-652-3042 (outside the U.S.), and using passcode 36946578.
This call can also be accessed through the Investor Relations section of the company’s website at www.mastercard.com.
Non-GAAP Financial Information
The presentation of growth rates adjusted for currency represent a non-GAAP measure and are calculated by remeasuring the prior period’s results using the current period’s exchange rates.
About MasterCard Incorporated
MasterCard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MasterCardNews, join the discussion on the Cashless Pioneers Blog and subscribe for the latest news on the Engagement Bureau.
Statements in this press release which are not historical facts, including statements about MasterCard’s plans, strategies, beliefs and expectations, are forward-looking and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date they are made. Accordingly, except for the company’s ongoing obligations under the U.S. federal securities laws, the company does not intend to update or otherwise revise the forward-looking information to reflect actual results of operations, changes in financial condition, changes in estimates, expectations or assumptions, changes in general economic or industry conditions or other circumstances arising and/or existing since the preparation of this press release or to reflect the occurrence of any unanticipated events. Such forward-looking statements include, without limitation, statements related to the Company’s business prospects, including with respect to its merchant relationships and mobile and online solutions.
Actual results may differ materially from such forward-looking statements for a number of reasons, including those set forth in the company’s filings with the Securities and Exchange Commission (SEC), including the company’s Annual Report on Form 10-K for the year ended December 31, 2013, the company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that have been filed with the SEC during 2014, as well as reasons including difficulties, delays or the inability of the company to achieve its strategic initiatives set forth above. Factors other than those listed above could also cause the company’s results to differ materially from expected results.
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