MasterCard meets 2Q earnings expectations, misses revenue forecasts

As a quick remainder, Mastercard reported 1st quarter March/15 EPS of $0.89 per share vs. $0.80 consensus on revenue of $2.23 billion. Earnings, adjusted for non-recurring costs, were 85 cents per share. Quarterly revenue would have risen 7 percent were it not for the impact of the dollar, as well as other currency fluctuations.

In the latest quarter, purchase volume grew 12%, on a constant-currency basis, to $841 billion.

MasterCard’s cross-border volumes – the value of transactions made by card holders outside the card-issuer’s country – jumped by 17 percent.

The Purchase, N.Y.-based company has warned that its results for the year would face pressure from the strong U.S. dollar and weakness in currencies like the euro and the Brazilian real. Revs are projected to be 1.68% higher than the $2.38 billion posted in the same quarter a year earlier.

“Our business continues to perform well with good transaction and volume growth, particularly in cross-border, despite the mixed global economic environment and foreign exchange headwinds”, CEO Ajay Banga stated. The company said that acquisitions added about two percentage points to its revenue growth during the quarter, which means that on an organic basis, revenue from continuing internal operations actually fell in U.S. dollar terms. Yet there’s no way to know when the forces that have strengthened the dollar will start to reverse themselves.

The payment processor earned $921 million, down from $931 million a year earlier.

On Tuesday, shares closed up 0.82% to $95.16. Yet for long-term investors, the return of growth that could come from dollar stabilization might well make a small decline in share price look like a bargain opportunity.