May 04, 2010
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News: MC First Qtr Beats Expectations
As expected, MasterCard, the second largest credit card network reported on first quarter results today. Like its rival, MasterCard performed better than expected as Americas increased credit card spending sending MC's earnings soaring to $455 million up from $367 from same time last year. Net revenue increased by 13.1 percent to $1.3 billion. The increased earnings are a strong indicator that the recession has come to an end and card customers are feeling more confident in spending. It is also be a sign that lenders might have dealt with the majority of bad debt and current credit card customers are dedicated to maintain accounts in good standing.
MasterCard's rival, Visa, also reported better than expected revenues for its fiscal second quarter. Visa reported a profit of $713 million, a 19 percent increase for its fiscal second quarter 2010 which ended March 31. Together, MasterCard and Visa shared credit card spending increases of 3.6 percent for the first quarter physical year 2010. According to the U.S. Commerce Department, the increase in credit card spending is the biggest surge since 2007 and is likely also part of a leveling out of card delinquencies and defaults. Based on a Federal Reserve report, revolving credit debt fell for the 17th consecutive month to $858.1 billion, a 13.1 percent decrease.
Robert W. Selander, MasterCard's Chief Executive Officer said that the company has started the "year with strength across several of our business drivers, including healthy cross-border volumes, which contributed to our solid first quarter results." Worldwide MasterCard's debit and credit card purchase transactions increased to $473 billion based on U.S. currency; an 8.7 percent increase from same time last year. In terms of numbers of transactions, total card transactions rose to 5.4 billion; a 4.6 percent increase from same period in 2009. MasterCard Worldwide is traded on the New York Stock Exchange (NYSE) under the symbol MA and is a multinational corporation and is headquartered in Harrison, New York.