MasterCard shares dip on revenue warning
MasterCard Inc
The world's second-largest credit card network said lower expenses and increased fees helped first-quarter results.
Net income fell to $367 million, or $2.80 per share, from $447 million, or $3.37 per share, a year earlier. But the results beat Wall Street expectations. Analysts, on average, had expected earnings of $2.62 per share, according to Reuters Estimates.
Net revenue fell 2.2 percent to $1.2 billion, hurt by a stronger dollar. Operating expenses decreased 10.8 percent as MasterCard trimmed advertising and marketing spending, tightened travel expenses and slashed consulting fees.
The company's bigger rival, Visa Inc
MasterCard is partially insulated from the credit crisis because it processes transactions rather than lends funds. But the company has seen a slowdown in the growth of revenue and transaction volumes as battered consumers used their credit cards less.
The company said net revenue growth this year will fall short of its long-term goal of 12 percent to 15 percent. It forecast 2009 operating expenses would be flat to slightly lower compared with last year, including the impact of all severance charges.
The firm's first-quarter gross dollar volume inched up 0.3 percent to $550 billion on a local currency basis, but the growth was slower than in recent quarters. Purchase volume grew only 0.3 percent, hit by lower use of credit cards in the United States and a slowdown in Europe, Canada, Asia and Latin America.
MasterCard shares were down 4.6 percent at $175.00 in premarket trading. The stock closed at $183.45 Thursday, after touching its highest level in seven months, and is up 33 percent this year.
(Reporting by Juan Lagorio; Editing by John Wallace)
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