Yahoo Finance Mastercard Cuts Forecast, Network Spending Misses Estimates
(Bloomberg) -- Mastercard Inc. cut a forecast for full-year revenue growth, citing foreign-exchange headwinds outside of the company’s control, as first-quarter spending on the payments giant’s network fell short of estimates.
Most Read from Bloomberg
US and Saudis Near Defense Pact Meant to Reshape Middle East
NYPD Arrests Over 300 Protesters in Crackdown on College Campuses
The Ozempic Effect: How a Weight Loss Wonder Drug Gobbled Up an Entire Economy
Lilly Soars as Forecast Boost Shows Weight-Loss Drugs’ Power
The company expects net revenue growth to be at the low end of low double digits for 2024, compared with previous guidance for growth at the high end of low double digits, according to a presentation Wednesday. Currency exchange is now expected to be a headwind given the recent appreciation of the US dollar, Chief Financial Officer Sachin Mehra said on a conference call with analysts.
“It’s a little bit of things we control versus things we don’t control,” Mehra said of the foreign-exchange challenges in a separate interview. If factors change, the company will adjust its outlook accordingly, he said.
On a currency-neutral basis, excluding acquisitions, the guidance for net revenue was unchanged from a prior forecast, with growth expected to be at the high end of low double digits.
Shares of the Purchase, New York-based company slipped 0.9% at 12:13 p.m. in New York. They had climbed 5.8% this year through Tuesday.
Total network spending volume rose 8.6% from a year earlier to $2.29 trillion, though that missed estimates of $2.32 trillion. Still, adjusted earnings for the first three months of the year totaled $3.31 a share, beating the $3.23 average of estimates in a Bloomberg survey.
“Our momentum continued this quarter, as we delivered strong revenue and earnings growth powered by healthy consumer spending, strong cross-border volume growth of 18% year-over-year and new deal wins in every region,” Mastercard Chief Executive Officer Michael Miebach said in a statement Wednesday.
Rival Visa Inc. also beat earnings estimates, reporting adjusted net income of $5.1 billion for the first quarter as spending climbed, and American Express Co. saw its revenue jump 11% in the period.
During the quarter, Mastercard and Visa reached one of the largest antitrust settlements ever, agreeing to cap credit-card interchange fees and allowing merchants to charge customers more for using certain cards and use pricing tactics to steer consumers away from higher-cost cards. The agreement, which merchants said would save them at least $30 billion over five years, is subject to court approval.
Mastercard’s customers had issued 3.4 billion Mastercard- and Maestro-branded cards by the end of the period, the company said.
The competitive landscape has gotten both more crowded, with the growth of players like Block Inc. and Stripe Inc., and more complex, with the rise of buy now, pay later options and payments moving directly from customers’ bank accounts to businesses. Mehra said Mastercard is positioning itself to take advantage in the future, and is “all for” making available whatever payment option a consumer may choose.
“You want to be at the place where consumers choose to go at some point in time,” he said.
(Updates with CFO interview starting in third paragraph.)
Most Read from Bloomberg Businessweek
AI Is Helping Automate One of the World’s Most Gruesome Jobs
Modi Is $20 Trillion Short on His Grand Plan for India’s Economy
China Launches Rockets From Sea in Bid to Win the Space Race
©2024 Bloomberg L.P.
