Home Banking & Finance MasterCard reveals ‘solid’ earnings report for 2012

MasterCard reveals ‘solid’ earnings report for 2012

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Despite the negative impact of Hurricane Sandy and the seemingly endless fiscal cliff debate, MasterCard Inc. showed growth in the fourth quarter of 2012 and throughout the year.

The financial earnings report revealed the Purchase-based corporation earned a net income of $605 million in the fourth quarter of 2012, an 18 percent increase of  over the same period in 2011, and earnings per diluted share of $4.86 rose 21 percent.

The company’s net revenue grew 10 percent to $1.9 billion in the fourth quarter of 2012 as compared to fourth quarter of 2011.  Operating expenses also increased 4 percent year-over-year. Coupled with net revenue growth, that resulted in net income growth of around 21 percent.

MasterCard also noted processed transactions were up 20 percent to 9.2 billion, as well as a 17 percent growth in cross-border volumes in the fourth quarter of 2012. The company also reported a 14 percent increase in gross dollar volume on a local currency basis that reached $986 billion.

Worldwide, purchase volume during the fourth quarter of 2012 increased 13 percent on a local currency basis compared to previous year. The company’s client base had also issued 1.9 billion MasterCard and Maestro-branded cards as of December 31, 2012.

The fourth quarter of 2012 also saw MasterCard repurchase 1.3 million shares of class A common stock at an estimated cost of $613 million.

Ajaypal S. Banga, president and CEO of MasterCard, said the fourth quarter of 2012 “completed a solid year with performance in line with our expectations.” He also noted that despite the growth in 2012, the company still has a “cautious outlook going into 2013.”

Over the full-year of 2012, MasterCard reportedly earned a net income of $2.8 billion, a 15 percent increase and earnings per diluted share of $22.04 up 18 percent over 2011. Net revenue for the company in 2012 reached $7.4 billion, an increase of 10 percent compared to 2011. With a currency adjustment net revenue grew 13 percent. Operating expenses also grew 6 percent to $3.4 billion for 2012. In 2012, MasterCard repurchased 4.1 million shares at an estimated cost of $1.7 billion.

Looking ahead, the company is mindful that the economic uncertainty will remain a factor in their projections.  Martina Hund-Mejean, CFO of MasterCard, said the company will “expect net revenue growth in the first half of 2013 to be below the 10.7 percent currency adjusted rate that we saw in the second half of 2012.” She added, “Given our investments and initiatives such as mobile, eCommerce and information services, our total operating expenses will continue to grow likely just a bit below the 8 percent currency adjusted gross rate we saw in 2012 with more money being put to use in all of the expense line items.”

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