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MasterCard Inc First Quarter Earnings Call Highlights

Author: 123jump.com Staff
Last Update: 2:30 PM ET May 05 2012
MasterCard Inc said first quarter revenues gained 17% and net income soared 21% and issued a cautious outlook. The company guided cumulative average annual revenues growth in 2012 and 2013 between 12% and 14% and stressed any additional PIN enabled debit card transaction yield lower than average.

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MasterCard Inc. (MA), the credit and debit card processor said first quarter revenues increased 17% to $1.76 billion from $1.50 billion in the same quarter a year ago.

Net income in the quarter surged 21% to $682 million or $5.36 per diluted share compared to $562 million or $4.31 per share in the year ago.

Quarterly Performance

- First quarter 2012 quarterly revenues increased 17% drive by 3 percentage point increase in price, net income increased 21% and EPS rose 25%.
- Net income increased 21% to $682 million and diluted earnings per share rose 25% to $5.36.

- General & Administrative expenses increased 17%.

- Total operating expenses increased 14% and operating income gained 20%
- Cash flow from operations was $427 million
- Cash, cash equivalents and investments of about $5.1 billion.

Operating Metrics

- U.S. Gross Domestic Volume increased 14% driven by 21% increase in debit growth and Europe quarterly volumes increased 19%.

- MasterCard debit card now enables about half of all debit cards, including three of the largest portfolios.

- In April, our U.S. processed volume, proxy for GDV, increased 10% less than 15% in the first quarter on the impact of the extra day in the quarter, leap year and the tax refunds programs and the lack of new business wins.

- Process volume growth was 16%, less than 19% in the first quarter due to the leap year and globally process transaction growth was 32%.

- Transaction processing fees increased 21% on 29% increase in volume and incremental revenues come at a lower yield.

- Rebates and incentives increased 24% on the impact of new and renewed deals on stronger volume growth.

The company estimates that share of PIN debit transactions exceeded 20% in April, up from single digits last year.

- Process transaction in Europe increased 40%.
- Process growth of Italy, Portugal, Ireland, Spain and Greece in aggregate rose in mid-teens.
- In Latin America, Middle East and Africa regions domestic and cross-border volume rose more than 20%.

- Cross-border volumes increased 18% and transaction processing fees increased 21%
- Gross dollar volume on a local currency basis increased 18% to $849 billion
- Processes transactions surged 29% to 7.7 billion

- Credit volumes in the U.S. grew 7% and outside of the United States, growth was 21% and 19% in Europe.
- Global card growth was 9% to 1.8 billion MasterCard and Maestro-branded cards.

Access Prepaid and DataCash Business

- Access Prepaid, bought from Travelex in April 2011, volume increased 25% from 2010, and will issue prepaid MasterCards through Thomas Cook in the second half and in Australia launched multi-currency purse that can hold as many as 10 currencies.

- DataCash Internet gateway, purchased 18 months ago, saw 25% increase in transaction from a year ago.
- DataCash business grows in three ways; directly acquiring online merchants, white labeling and bundling with e-commerce solution providers.
- DataCash completed the integration of e-commerce solution with China UnionPay.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc