MasterCard profit beats expectations as customers spend more
By Tanya Agrawal
(Reuters) - MasterCard Inc (MA.N: Quote), the world's No. 2 debit and credit card company, reported a better-than-expected profit for the holiday shopping quarter as customers dug deeper into their pockets.
MasterCard and larger rival Visa Inc V.N have been benefiting as more people use cards instead of cash across the world. However, a stronger dollar is expected to crimp their profits this year as overseas markets account for a large chunk of their transactions.
The dollar, which gained nearly 13 percent .DXY in 2014, is expected to continue to be a headwind through the year on both revenue and the bottom line, MasterCard said on a conference call on Friday.
The company said it expects net revenue growth for the period between 2013 and 2015 to come in at the low-end of its previously announced target of 11-14 percent.
Visa also reported a better-than-expected quarterly profit on Thursday but said the stronger U.S. dollar has substantially reduced travel into the U.S. from Europe, Canada, and Latin America.
Both MasterCard and Visa get about 60 percent of their payment volumes from outside the United States.
MasterCard's worldwide purchase volume increased 12.1 percent to $858 billion in local currency terms during the fourth quarter ended Dec. 31, while its cross-border volumes rose 19 percent.
MasterCard said in December overall U.S. retail sales rose 5.5 percent from the day after Thanksgiving through Christmas Eve as demand for women's apparel, jewelry and casual dining offset sluggish sales of electronics. Continued...