Mastercard Inc. reported its earnings for the second quarter that easily surpassed consensus forecast, as customer card spending jumped. Shares were up nearly 2 percent in the mid-day trading session on Thursday following the results.
The second-largest U.S. payments network said that it earned $983 million, or 89 cents per share in the latest quarter, up 6.7 percent from $921 million, or 81 cents per share in the year-earlier quarter. Factoring out a litigation charge, earnings were 96 cents per share that easily surpassed 90 cents per share estimated by analysts polled by Bloomberg.
Under the supervision of Chief Executive Officer Ajay Banga, Mastercard is advancing as more people opt for electronic payments instead of traditional cash and checks. The company has started making investment in payments technology ranging from a robot that can take customers’ orders at Pizza Hut to a refrigerator that can order groceries.
The Purchase, New York-based company posted revenue of $2.69 billion for the second quarter, up 13 percent from the same period last year, and above consensus forecast of $2.59 billion. The company said that purchase volume jumped 9.4 percent to $897 billion.
Rebate and incentive spending surged as customers are now demanding better rewards and vendors continue to pursue improved terms, compelling banks and card networks to sweeten terms on rewards and fees.
The company recently disclosed that it has decided to pay 700 million pounds for a controlling stake in U.K.-based payments firm, VocaLink Holdings Ltd that manages payroll and household bill processing in the country. The agreement, Mastercard’s biggest since its IPO in 2006, will help the company in significantly strengthening its foothold in Britain. Bigger competitor Visa increased it presence there with the acquisition of Visa Europe this year for roughly $20 billion.