An employee stands behind a MasterCard logo in this file photo.Soe Zeya Tun/Reuters
MasterCard Inc., the second-largest U.S. payments network, posted fourth-quarter profit that beat analysts' estimates as customer spending climbed.
Net income rose 29 per cent to $801-million, or 69 cents a share, from $623-million, or 52 cents, a year earlier, the Purchase, New York-based company said Friday in a statement. The average estimate of 34 analysts surveyed by Bloomberg was for profit of 67 cents a share, adjusted for one-time items.
Chief Executive Officer Ajay Banga, 55, is investing in new technologies and forging partnerships with companies including Apple Inc. as consumers increasingly use mobile phones and other digital devices to make payments. While a strengthening U.S. dollar and geopolitical tensions have curbed business abroad, MasterCard continues to benefit from a global shift from cash and checks to electronic payments.
"The company's long-term growth story remains intact," Darrin Peller, a Barclays Plc analyst, said before results were released. "The underlying drivers of MasterCard's growth and profitability suggests further outperformance."
MasterCard rose 3.2 per cent to $84 at 8:02 a.m. in early trading in New York. The shares climbed 3.1 per cent last year, trailing the 11 per cent advance of the Standard & Poor's 500 Index. The company raised its quarterly dividend to 16 cents a share last month and announced a new stock-repurchase program.
MasterCard may raise some fees it charges banks in April, which could add as much as $200-million in revenue in 2015, according to estimates from Barclays. Larger competitor Visa Inc. has also said it plans to increase some fees this year.
American Express Co., the nation's biggest credit-card issuer by purchases, said Jan. 21 that fourth-quarter profit increased 11 per cent to $1.45-billion as revenue rose 6.6 per cent. Visa said Thursday that net income for the period ended Dec. 31 climbed 12 per cent to $1.57-billion as card spending increased.