Travel does it againMastercard gave a bullish view of not only its first quarter, but also the now-booming travel industry.
- Prices gained 4.8% on Thursday to hit its highest levels since mid-Feb following a beat on both the top and bottom lines. The financial giant reported EPS of $2.76 on revenues of $5.2bn, as well as reporting a 22% jump in card spending.
- Customers are splurging on travel, and card companies are reaping the rewards. CEO Michael Miebach says it's the first time cross-border is at pre-2019 levels – up 53% – helping gross dollar volumes jump 17%.
- The effects of inflations have yet to make their mark, said its CFO, even as its expenses rose 13% from last year, and customers are still keen to splash the cash. Looking forward, revenue growth is forecast in the high teens, despite halting operations in Russia.
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Consumer spending fills Mastercard’s pocketsThese Q4 earnings were masterful at dodging the effects of Omicron.
- The stock ended the day up 1.7%, regaining losses that came at market open despite reporting an earnings beat on both ends with EPS of $2.41 on revenues of $5.2bn.
- There’s been a take-off in travel spending despite fresh waves of Omicron-induced lockdowns across the world, and CEO Michael Miebach says cross-border travel will be back to pre-pandemic levels by the end of the year.
- It wants to delve deeper into crypto. Its already made an NFT partnership deal with Coinbase (COIN), and Miebach says it's going to focus on Ethereum (ETHUSD) scalability this year.
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Mastercard makes the most of cross-border spendingMastercard posts an earnings beat for the third quarter on the back of a boost in international spending and economic recovery.
Mastercard posts third quarter earnings on the heels of its worst single day drop in around a year on Wednesday, when prices lost just under 7% following a new crypto partnership. The financial services giant beat on both the top and bottom lines, posting earnings per share of $2.37 and revenue of $5 billion, compared to expectations of $2.19 in earnings per share and $4.95 billion in earnings. After months of being stuck inside, this quarter has seen people return to socializing, dining out, and travelling, and sending spending volumes soaring. Gross dollar volumes, which is based on the number of transactions processed, lifted 20% to $2 trillion, and cross border spending values were up a whopping 52%. CEO Michael Miebach said:
Our performance was driven by the execution of our strategy, healthy domestic spending and solid growth in cross-border spending which has recently returned to pre-pandemic levels.
Mastercard didn’t provide any guidance for the fourth quarter, though it did say it expects a revenue growth percentage in the mid 20’s, about on par with analysts expectations. Ramsey El-Assal feels “upbeat” about the earnings report, but says:
The lack of a F22 view may be weighing modestly on shares in today’s tape.
Prices popped on Thursday but ultimately closed the day down 0.80%.
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Mastercard bolsters its crypto investmentMastercard bolsters its crypto investment with the acquisition of major crypto forensics company CipherTrace.
Mastercard has made another big bet on crypto and buys blockchain analytics company CipherTrace. The acquisition comes after the card giant announced in February that it would begin supporting a select few digital currencies on its network. Ajay Bhalla, president of cyber and intelligence at Mastercard said:
Digital assets have the potential to reimagine commerce, from everyday acts like paying and getting paid to transforming economies, making them more inclusive and efficient. With the rapid growth of the digital asset ecosystem comes the need to ensure it is trusted and safe. Our aim is to build upon the complementary capabilities of Mastercard and CipherTrace to do just this.
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