Categories Analysis, Earnings, Finance

Earnings preview: Pros to outweigh cons when Mastercard posts Q3 results

The payments industry has remained largely unaffected by the tariff-induced trade disruptions and political uncertainties, thanks to the booming economy and people’s spending power. Mastercard (MA), which is slated to report third-quarter results on October 30 before the market opens, bets on that. Analysts see a 25% year-over-year increase in earnings to $1.68 per share, on revenues of $3.86 billion.

The New York-based credit card firm has been doing well in the recent quarters, cashing in on its initiatives to broaden the network of co-branding partners and investments in technology to stay relevant in the digital payment space.

Mastercard Q3 2018 earnings preview

While the growing payments volumes and processed transactions across markets continue to be the main growth drivers, profitability might come under pressure from the high rebates and incentives offered to customers. Also, rising costs and the resultant squeeze on margins remain a challenge. The management has been successful in tapping the new opportunities in the sector and position the company to compete effectively with rival and industry leader Visa (V).

This year, the payment industry as a whole witnessed hectic activity, owing to the improving economic conditions globally and positive consumer sentiment – factors that brighten the prospects of credit card service providers.

Also see: Mastercard Q2 2018 Earnings Conference Call Transcript 

In the second quarter, Mastercard’s adjusted earnings climbed to $1.7 billion or $1.66 per share from $1.2 billion or $1.10 per share in the prior-year quarter, benefitting from a 20% growth in revenues to $3.7 billion.

Earlier this week, Visa reported better-than-expected earnings for its fourth quarter, while revenues came in line with the street view. Earnings jumped about 30% to 1.23 per share and revenues gained 12% to reach $5.4 billion. Amex (AXP) posted a 22% growth in earnings for the third quarter when revenues rose 9% to around $10 billion, aided by higher cardmember spending and transaction fees.

Shares of Mastercard dropped in the early trading hours Friday, after closing the previous session sharply higher. The stock, which advanced about 28% since the beginning of the year, peaked in early October.

 

Get access to timely and accurate verbatim transcripts that are published within hours of the event

Most Popular

Earnings Preview: Home Depot’s Q3 report likely to reflect weak consumer demand

The US housing industry has been mostly resilient to headwinds like economic uncertainties so far this year. However, housing activity cooled in recent months as high mortgage rates and inflation

What to look for when CVS Health (CVS) reports Q3 earnings

Healthcare company CVS Health Corporation (NYSE: CVS) is all set to report earnings next week, with Wall Street expecting a mixed outcome. The company has been facing challenges in certain

eBay (EBAY): A few factors that helped drive growth in Q3 2024

Shares of eBay Inc. (NASDAQ: EBAY) stayed green on Friday. The stock has gained 32% year-to-date. The ecommerce leader delivered revenue and earnings growth for the third quarter of 2024,

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top