Mastercard Inc MA-N on Thursday reported a 49 per cent jump in first-quarter profit as cross-border travel surpassed 2019 levels for the first time since the coronavirus pandemic began, sending its shares up 3.7 per cent in premarket trading.
Pent-up demand for travel and dining out despite a galloping inflation has fuelled a surge in spending by Americans who stayed homebound for a prolonged period.
Mastercard’s cross-border volume, a metric that tracks spending on cards beyond the country of issue and offers an insight into travel recovery trends, grew 53 per cent on a local currency basis.
The company rounds out an upbeat quarter for card companies as spending momentum continued to gain despite speed bumps from inflation and new coronavirus variants. Peers American Express Co AXP-N and Visa Inc V-N also reported profits that beat expectations.
New York-based Mastercard reported gross dollar volume growth of 17 per cent to $1.9-trillion. The metric represents the total dollar value of all transactions processed by Mastercard. However, its operating expense jumped 13 per cent.
Mastercard’s profit rose to $2.6-billion, or $2.68 per share, for the three months ended March 31 compared to $1.8-billion, or $1.83 per share, a year earlier.
Excluding one-time costs, the New York-based company reported earnings of $2.76 per share. Analysts on average had expected $2.17 per share, according to Refinitiv.
It was not immediately clear if the reported numbers were comparable to estimates.
Mastercard’s net revenue rose 28 per cent on a currency neutral basis to $5.2-billion.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.