Mastercard's (MA) Q3 Earnings, Revenues Miss on Lower Spending
Zacks Investment Research | Oct 28, 2020 01:28AM ET
Mastercard Inc.’s MA third-quarter 2020 earnings of $1.60 per share missed the Zacks Consensus Estimate by 3.03% and were also down 25% year over year.
Earnings suffered lower switched transactions and weak cross-border business.
Rebates and incentives were flat but inched up 2% on a currency-neutral basis.
Mastercard’s revenues of $3.8 billion lag the Zacks Consensus Estimate by 3.6% and also fell 14% on a currency-neutral basis. Total adjusted operating expenses declined 5% to $1.7 billion owing to a dip in advertising and marketing, travel and professional fee spend.
Other revenues grew 5% or 6% on a currency-neutral basis. This also includes a 2% increase on acquisitions. Remaining growth was driven, primarily by the company’s Cyber & Intelligence and Data & Services solutions.
h3 Mastercard Incorporated (NYSE:MA) Price, Consensus and EPS Surprise/h3Adjusted operating margin of 54.9% was down 420 basis points year over year.
Gross dollar volume was up 1% to $1.6 trillion while cross-border volumes plunged 36% on a local-currency basis.
Switched transactions, which indicate the number of times a company’s products were used to facilitate transactions, were up 5% year over year.
As of Sep 30, 2020, the company’s customers issued 2.7 billion Mastercard and Maestro-branded cards.
h3 Share Repurchase and Dividend Payout/h3During the quarter, Mastercard bought back 6.5 million shares at a cost of $2.1 billion and paid $402 million in dividends.
h3 Balance Sheet Position/h3The company’s long-term debt as of Sep 30, 2020 was $12.57 billion, up 47.5% from the level as of Dec 31, 2019 because a $4-billion long-term debt was issued in March. However, cash and cash equivalents of $10.23 billion soared 46.3% from the level as of Dec 31, 2019.
h3 Zacks Rank/h3Mastercard carries a Zacks Rank #3 (Hold), currently. You can see
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