MasterCard is lifted by rise in card spend

 
City A.M. Reporter
MASTERCARD, the world’s second-largest credit and debit card processing network, said its second quarter profit rose 31 per cent yesterday, beating expectations as the company reined in expenses and consumers slowly resumed spending and travelling abroad.

The New York-based company reported net income of $458m (£287.4m) or $3.49 per share yesterday, compared with $349m or $2.67 per share in the same period a year earlier. Analysts on average had expected MasterCard to post a profit of $3.33 per share, according to Thomson Reuters.

The company attributed its results in part to an increase in spending on its cards, especially outside of the United States.

The gross dollar volume of the transactions MasterCard processed rose about 8.5 per cent globally from a year earlier, to $656bn, though growth in US gross dollar volume was flat at $244bn.

MasterCard also said more consumers have resumed travelling – and spending money – abroad, as the economic conditions slowly start to improve. Its cross-border volumes increased 15.2 per cent from a year earlier.

Revenues rose 6.7 per cent to $1.4bn, slightly below analysts’ average expectations, while MasterCard cut expenses by 10.4 per cent, to $648m, from a year earlier. The company said it paid less in salaries and severance this quarter, after laying off employees during 2009.