* First-quarter adj. EPS $1.01 vs est 95 cents
* Rev $2.73 bln vs est $2.65 bln
* Adj. gross dollar volumes up 8 pct
* Shares hit record-high
(Adds CFO comment, Updates shares)
By Nikhil Subba
May 2 MasterCard Inc, the world's
second-largest payments network, reported higher-than-expected
quarterly profit and revenue as people spent more using credit
and debit cards, sending its shares up as much as 3 percent to a
MasterCard and bigger rival Visa Inc generate revenue
by facilitating credit- and debit-card transactions and their
fortunes are closely tied to the health of the economy and
U.S. economic data has been largely positive in the past few
months - the labor market has shown signs of improvement, while
average wages are also up.
Underpinned by a recovering global and U.S. economy, stocks
of both MasterCard and Visa, which share a global duopoly, have
surged about 19 percent in the past year.
But the companies are facing increasing competition from
digital payment services as more people use smartphones to make
payments, forcing them to ramp up their own e-wallet offerings.
MasterCard said on Tuesday it spent $170 million on
advertising and marketing in the first quarter, up 26 percent,
to support the rollout of Masterpass - its digital wallet
Advertising and marketing spending in the second quarter is
also expected to increase by about $40 million from the year-ago
period, Chief Financial Officer Martina Hund-Mejean said on a
call with analysts.
She also said near-term revenue growth would be affected by
a rise in incentives in new and renewed agreements.
MasterCard's net income rose 12.7 percent to $1.08 billion
in the first quarter ended March 31. On an adjusted basis, the
company earned $1.01 per share, beating the average analyst
estimate of 95 cents, according to Thomson Reuters I/B/E/S.
Total revenue rose 11.8 percent to $2.73 billion, beating
the average estimate of $2.65 billion. (mstr.cd/2qthx67)
MasterCard, which processes more than 65,000 transactions a
minute, said adjusted gross dollar volumes rose 8 percent to
$1.18 trillion in the quarter on a local currency basis.
Cross-border volumes - the value of transactions made by
card holders abroad - increased 13 percent on a local currency
Total costs rose to $1.23 billion from $1.09 billion a year
earlier as advertising and marketing spend increased.
The company reiterated its 2016-2018 guidance of revenue
growth in low double-digits and full-year 2017 operating
expenses to grow in the high single-digit range.
MasterCard's shares were up 2.3 percent at $119.10 in
(Reporting by Nikhil Subba in Bengaluru; Editing by Sai Sachin
Ravikumar and Saumyadeb Chakrabarty)