Mastercard Inc (NYSE: MA) rose over 2.9% today (as of 2 May, 11:02 AM GMT-4; Source: Google finance) given their better than expected results. The company is investing in areas such as safety and security and the digital solutions to boost long-term growth, with a focus on delivering simple and secure transactions across all channels. As of March 31st, 2018, the company’s customers had issued 2.4 billion Mastercard and Maestro-branded cards, adjusted for the impact of the Venezuela deconsolidation
MA in the first quarter of FY 18 has reported the adjusted earnings per share of $1.50, beating the analysts’ estimates for the adjusted earnings per share of $1.26 as per Zacks Investment Research. The company had reported the adjusted revenue growth of 31 percent to $3.58 billion in the first quarter of FY 18, beating the analysts’ estimates for revenue of $3.25 billion.
Meanwhile, the new revenue recognition rules and acquisitions has contributed 4 and 2.5 percentage points to the revenue growth, respectively. Excluding those items, underlying revenue growth was 20%, due to an increase in switched transactions of 17%, adjusted for the impact of the Venezuela deconsolidation, to 16.7 billion. Further, the , underlying revenue grew due to an increase in cross-border volumes of 21% on a local currency basis and a 14% increase in gross dollar volume, on a local currency basis, to $1.4 trillion. However, these increases were partially offset by an increase in rebates and incentives, primarily due to increased volumes and new and renewed agreements.
Moreover, during the first quarter 2018, the total operating expenses has risen 43%. Excluding the impact of Special Items, the adjusted operating expenses rose 35%, or 32% on a currency-neutral basis. This includes 8 percentage points of growth from acquisitions, 8 percentage points of growth from the $100 million contribution to the Mastercard Center for Inclusive Growth, a non-profit charitable organization, and 3 percentage points of growth from the adoption of the new revenue recognition rules. The remaining underlying expense growth of 12 percentage points is primarily related to the continued investments in strategic initiatives.
During the first quarter of 2018, MA has repurchased approximately 7.9 million shares at a cost of $1.4 billion and paid $263 million in dividends. Quarter-to-date through April 27th, 2018 the company has repurchased an additional 3.5 million shares at a cost of $608 million, which leaves $3.3 billion remaining under current repurchase program authorizations.