Mastercard Shares Rally On Earnings Beat

mastercard shares

Mastercard Inc shares rallied on Tuesday after the company posted a positive earnings report that beat most analyst expectations. Mastercard shares were up by more than 1% on Tuesday to $151.50 during the early trading session. Mastercard’s stock has gained around 44% this year and has exceeded the S&P 500 Financials Index 35% increase.

The company posted earnings of $1.34 per share for the third quarter. Their EPS is higher than that of their earnings during the same quarter last year. Their earnings also beat most Wall Street estimates of $1.23 per share for the third quarter.

Mastercard’s revenue for the quarter came in at $3.40 billion representing a growth from last year’s revenue of $2.88 billion during the third quarter last year. Their revenue also beat most analyst estimates of $3.28 billion for the third quarter.

Mastercard’s VocaLink acquisition contributed a growth of 18% in their revenue in their payments network for the quarter. The acquisition which cost Mastercard around $920 million has helped Mastercard in their person to person and business to business payments markets which is currently being led by banking actions and services such as cash and check or direct bank transfers.

During the second quarter, the company was also beat consensus earnings estimates with their earnings coming in at $1.10 per share while their revenue was at $3.1 billion for the second quarter. Mastercard’s net income also was up from $1.0 billion from the second quarter during the prior year to $1.2 billion.

Chief financial officer Martina Hund-Mejean stated that the quarter’s activities are going well and is off to a good start especially with the presence of VocaLink.

The company posted an operating income of $1.94 billion for the third quarter which is an increase from their operating income from the prior year of $1.94 billion for the same quarter. Mastercard’s net income of $1.43 billion for this year’s third quarter was also higher than their income of $1.18 billion in the same period a year ago.

The financial company also posted a growth of 20% in their operating expenses with 8% of the expenses being attributed to their acquisitions primarily from their acquisition of Vocalink as the company continuously expanded their efforts in investing in strategic initiatives.

During Mastercard’s conference call following the earnings report released on Tuesday, chief executive officer Ajay Banga stated that Mastercard is currently embracing new technologies that will allow them to connect better with the online payments scene. One of these plans includes the integration of payments with smartwatch makers and as well as in augmented programs.

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