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Mastercard MA-N beat Wall Street estimates for fourth-quarter profit on Wednesday, as the payments processor benefited from resilient consumer spending during the holiday shopping season.

The report capped a robust year for the company as hopes of a “soft landing” for the economy and bets of interest rate cuts by the U.S. Federal Reserve encouraged big-ticket purchases and more travel.

Last week, Visa V-N reported a better-than-expected quarterly profit for the holiday season.

“The labour market remains strong with low unemployment and rising wages. These remain key drivers of consumer spending,” Mastercard CEO Michael Miebach said.

Earlier this month, a survey by the University of Michigan showed that U.S. consumer sentiment hit its highest level in 2-1/2 years in January.

Mastercard shares were up 1 per cent in afternoon trading.

The company’s forecast for revenue growth in 2024 was in line with expectations. However, it projected higher-than-expected annual costs.

“The outlook was below our bull-case scenario, but a potential outcome we anticipated,” J.P. Morgan analyst Tien-tsin Huang said. “Investors were optimistic about a slightly faster revenue outlook for FY24.”

In the fourth-quarter, adjusted operating expenses jumped 10 per cent to $2.9-billion, largely due to personnel costs.

Thanks to their strong performance over the last year, card firms have largely avoided the extent of layoffs that many companies in corporate America have had to undertake.

Excluding one-time costs, Mastercard’s profit of $3.18 per share beat estimate of $3.08, according to LSEG data.

Gross dollar volume, the dollar value of all transactions processed on Mastercard’s platform, climbed 10 per cent.

Cross-border volume, a gauge of travel demand that tracks spending on cards outside the country of their issue, jumped 18 per cent.

Net revenue rose 13 per cent to $6.5-billion.

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