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Mastercard (MA) Q2 Earnings Beat on Strong Cross-Border Volumes
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Mastercard Incorporated (MA - Free Report) reported second-quarter 2024 adjusted earnings of $3.59 per share, which outpaced the Zacks Consensus Estimate by 2.3%. The bottom line climbed 24.2% year over year.
Net revenues of the leading technology company in the global payments industry amounted to $7 billion, which improved 11% year over year in the quarter under review. The top line beat the consensus mark by 1.7%.
MA’s strong second-quarter 2024 results benefited from resilient consumer spending and solid cross-border volumes. Higher demand for its value-added services and solutions and an expanding payment network also favored the results. However, the upside was partly offset by an increase in operating expenses.
Mastercard Incorporated Price, Consensus and EPS Surprise
Gross dollar volume (representing the aggregated dollar amount of purchases made and cash disbursements obtained from Mastercard-branded cards) rose 9% on a local-currency basis to $2.4 trillion in the second quarter. The figure missed the Zacks Consensus Estimate by 3%.
Cross-border volumes (a key measure that tracks spending on cards beyond the issuing country) increased 17% on a local currency basis. Switched transactions, which indicate the number of times a company’s products have been used to facilitate transactions, were 39.4 billion in the quarter under review. The figure grew 11% year over year and beat the consensus mark by 2.2% and our estimate by nearly 1%.
Value-added services and solutions net revenues improved 18% year over year. The growth can be attributed to the continued demand for its consulting and marketing services, loyalty solutions, as well as fraud and security capabilities.
Payment network rebates and incentives escalated 14% year over year in the second quarter as an impact of new and renewed deals.
Mastercard’s clients issued 3.4 billion Mastercard and Maestro-branded cards as of Jun 30, 2024.
Adjusted operating expenses of $2.8 billion increased 9% year over year due to elevated general and administrative expenses and met our estimate.
This Zacks Rank #3 (Hold) company’s operating income rose 10% year over year to $4 billion and beat our estimate by a whisker. Operating margin of 58% deteriorated 40 basis points year over year in the quarter under review. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Financial Position (as of Jun 30, 2024)
Mastercard exited the second quarter with cash and cash equivalents of $7 billion, which decreased from the 2023-end level of $8.6 million. The figure is way higher than the short-term debt of $1.1 billion.
Total assets of $42.3 billion declined slightly from the $42.4 billion figure at 2023-end.
Long-term debt amounted to $14.5 billion, up from $14.3 billion as of Dec 31, 2023.
Total equity of $7.5 billion improved from the 2023-end level of $7 billion.
Mastercard generated cash flows from operations of $4.8 billion in the first half of 2024, which rose from the year-ago level of $4.6 billion.
Capital Deployment Update
Mastercard bought back 10.2 million shares for $4.6 billion in the first half of 2024. It had a leftover buyback capacity of $8.7 billion as of Jul 26, 2024. It bought back another 1.9 million shares for $820 million in the quarter-to-date period through Jul 26. Mastercard paid out dividends worth $1.2 billion in the first half of 2024.
3Q24 Guidance
Management projects net revenues to register low-double-digit growth on a year-over-year basis in the third quarter of 2024, while adjusted operating expenses are anticipated to record low-double-digit growth as well.
2024 View Revised
Management now expects net revenue growth to witness the low-double-digit growth from the 2023 reported figure of $25.1 billion. Earlier, it expected low-end of low-double-digit growth. Adjusted operating expenses are estimated to increase in low-end of low-double-digit from the 2023 figure of $10.6 billion.
Performance of Other Players
Here are some companies from the broader Business Services space that have already reported earnings this season.
Visa Inc. (V - Free Report) reported strong third-quarter fiscal 2024 earnings, which benefited from expanding processed transactions and cross-border volume. Its earnings per share of $2.42 outpaced the Zacks Consensus Estimate by a penny. The bottom line rose 12% year over year.
Concerns regarding cooling consumer spending growth, especially in high-ticket and discretionary items, are likely to keep the stock under pressure.
American Express Company (AXP - Free Report) posted robust second-quarter 2024 earnings, driven by rising net interest income and growth in the customer base of Millennials and Gen-Z, driving growth in the U.S. Consumer Services Billed business.
The company’s second-quarter earnings per share of $3.49 beat the Zacks Consensus Estimate by 8.4%. The bottom line climbed 20.8% year over year.
FirstCash Holdings, Inc. (FCFS - Free Report) reported adjusted earnings of $1.37 per share, which beat the consensus mark of $1.36. Over the last four quarters, it beat earnings estimates each time, with an average surprise of 8.1%.
FirstCash posted revenues of $831 million in the reported quarter. The Zacks Consensus Estimate for earnings for the next quarter suggests 2.6% year-over-year growth.
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Mastercard (MA) Q2 Earnings Beat on Strong Cross-Border Volumes
Mastercard Incorporated (MA - Free Report) reported second-quarter 2024 adjusted earnings of $3.59 per share, which outpaced the Zacks Consensus Estimate by 2.3%. The bottom line climbed 24.2% year over year.
Net revenues of the leading technology company in the global payments industry amounted to $7 billion, which improved 11% year over year in the quarter under review. The top line beat the consensus mark by 1.7%.
MA’s strong second-quarter 2024 results benefited from resilient consumer spending and solid cross-border volumes. Higher demand for its value-added services and solutions and an expanding payment network also favored the results. However, the upside was partly offset by an increase in operating expenses.
Mastercard Incorporated Price, Consensus and EPS Surprise
Mastercard Incorporated price-consensus-eps-surprise-chart | Mastercard Incorporated Quote
Q2 Operational Performance
Gross dollar volume (representing the aggregated dollar amount of purchases made and cash disbursements obtained from Mastercard-branded cards) rose 9% on a local-currency basis to $2.4 trillion in the second quarter. The figure missed the Zacks Consensus Estimate by 3%.
Cross-border volumes (a key measure that tracks spending on cards beyond the issuing country) increased 17% on a local currency basis. Switched transactions, which indicate the number of times a company’s products have been used to facilitate transactions, were 39.4 billion in the quarter under review. The figure grew 11% year over year and beat the consensus mark by 2.2% and our estimate by nearly 1%.
Value-added services and solutions net revenues improved 18% year over year. The growth can be attributed to the continued demand for its consulting and marketing services, loyalty solutions, as well as fraud and security capabilities.
Payment network rebates and incentives escalated 14% year over year in the second quarter as an impact of new and renewed deals.
Mastercard’s clients issued 3.4 billion Mastercard and Maestro-branded cards as of Jun 30, 2024.
Adjusted operating expenses of $2.8 billion increased 9% year over year due to elevated general and administrative expenses and met our estimate.
This Zacks Rank #3 (Hold) company’s operating income rose 10% year over year to $4 billion and beat our estimate by a whisker. Operating margin of 58% deteriorated 40 basis points year over year in the quarter under review. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Financial Position (as of Jun 30, 2024)
Mastercard exited the second quarter with cash and cash equivalents of $7 billion, which decreased from the 2023-end level of $8.6 million. The figure is way higher than the short-term debt of $1.1 billion.
Total assets of $42.3 billion declined slightly from the $42.4 billion figure at 2023-end.
Long-term debt amounted to $14.5 billion, up from $14.3 billion as of Dec 31, 2023.
Total equity of $7.5 billion improved from the 2023-end level of $7 billion.
Mastercard generated cash flows from operations of $4.8 billion in the first half of 2024, which rose from the year-ago level of $4.6 billion.
Capital Deployment Update
Mastercard bought back 10.2 million shares for $4.6 billion in the first half of 2024. It had a leftover buyback capacity of $8.7 billion as of Jul 26, 2024. It bought back another 1.9 million shares for $820 million in the quarter-to-date period through Jul 26. Mastercard paid out dividends worth $1.2 billion in the first half of 2024.
3Q24 Guidance
Management projects net revenues to register low-double-digit growth on a year-over-year basis in the third quarter of 2024, while adjusted operating expenses are anticipated to record low-double-digit growth as well.
2024 View Revised
Management now expects net revenue growth to witness the low-double-digit growth from the 2023 reported figure of $25.1 billion. Earlier, it expected low-end of low-double-digit growth. Adjusted operating expenses are estimated to increase in low-end of low-double-digit from the 2023 figure of $10.6 billion.
Performance of Other Players
Here are some companies from the broader Business Services space that have already reported earnings this season.
Visa Inc. (V - Free Report) reported strong third-quarter fiscal 2024 earnings, which benefited from expanding processed transactions and cross-border volume. Its earnings per share of $2.42 outpaced the Zacks Consensus Estimate by a penny. The bottom line rose 12% year over year.
Concerns regarding cooling consumer spending growth, especially in high-ticket and discretionary items, are likely to keep the stock under pressure.
American Express Company (AXP - Free Report) posted robust second-quarter 2024 earnings, driven by rising net interest income and growth in the customer base of Millennials and Gen-Z, driving growth in the U.S. Consumer Services Billed business.
The company’s second-quarter earnings per share of $3.49 beat the Zacks Consensus Estimate by 8.4%. The bottom line climbed 20.8% year over year.
FirstCash Holdings, Inc. (FCFS - Free Report) reported adjusted earnings of $1.37 per share, which beat the consensus mark of $1.36. Over the last four quarters, it beat earnings estimates each time, with an average surprise of 8.1%.
FirstCash posted revenues of $831 million in the reported quarter. The Zacks Consensus Estimate for earnings for the next quarter suggests 2.6% year-over-year growth.