Mastercard Beats Earnings Estimates Despite Consumer-Spending Headwinds
Mastercard (NYSE: MA) stock was trading fractionally lower Thursday afternoon -- and generally in step with the broader market -- following the release of second-quarter earnings that beat analysts' consensus estimates.
Like its rival, Visa (NYSE: V), the credit card company's revenue and net income declined in the quarter due to reduced consumer spending. Net income fell 31% year over year to $1.4 billion, while earnings were down 30% to $1.41 per share. Net revenue dropped by 19% to $3.3 billion in the quarter.
Consumer spending fell due to the impact of the COVID-19 pandemic and the recession it triggered, which resulted in a 10% decline in the gross dollar volume of purchases made using Mastercard credit cards. Cross border volume was down 45%, while switched transactions fell 10%. Those declines were offset somewhat by 10% revenue growth from the company's cyber & intelligence and data & services solutions businesses.
Source Fool.com
