Shares of Mastercard saw an increase in trading after the company announced impressive numbers for its latest quarter. On Wednesday, Mastercard stock rose by 2.5% to $456.09, while the S&P 500 experienced a 0.7% decrease.
According to FactSet, fourth-quarter adjusted earnings per share were $3.18, surpassing Wall Street’s estimate of $3.08. This figure also reflects growth from $2.65 per share in the previous year. Furthermore, the company’s net income reached $2.8 billion, exceeding the $2.5 billion recorded a year ago.
Mastercard’s net revenue also outperformed expectations, totaling $6.5 billion compared to the estimated $6.48 billion. This result is notably higher than the $5.8 billion achieved in the previous year.
CEO Michael Miebach expressed satisfaction with their performance, stating, “We delivered strong earnings and revenue growth for the full year 2023, driven by healthy consumer spending, cross-border volume growth of 24%, and the solid execution of our strategy.” He also highlighted an important achievement in signing the third U.S. regulated bank debit portfolio flip to their network within the last 12 months.
However, the earnings report did reveal a negative aspect: a slowdown in switched volume. Switched volume refers to the total number and value of payment transactions processed through the Mastercard platform. In the fourth quarter, switched volume experienced an 11% decrease compared to a 14% decrease in the third quarter, as indicated in the earnings presentation.
Looking ahead, Mastercard anticipates net revenue growth at the “low-end of low-double-digits” for its first fiscal quarter. Analysts had projected revenue to reach $6.43 billion, representing a roughly 12% increase from the previous year.
Other major players in the industry have also reported their earnings recently. Visa surpassed quarterly earnings and sales estimates while maintaining its fiscal-year forecast. American Express, on the other hand, reported quarterly earnings below expectations but offered strong guidance and a dividend boost. Visa shares rose by 0.2% in response, while Amex stock saw a 0.4% increase.