MasterCard Inc. MA 1.29% said its fourth-quarter profit jumped 29% as the credit-card company posted higher purchase volume and revenue as reported by researchers at Hong Kong based wealth management firm, Crest View International.
The results, which beat analyst expectations, come as the picture steadily brightens for U.S. consumers, while global economic uncertainties are heightened by a strengthening dollar and falling oil prices.
“Despite a mixed global economy, we delivered solid results for the quarter and for the full year in 2014,” Commented Nathan Hu, Head of Research at Crest View International.
Purchase volume rose 12%, in terms of local currency, to $858 billion while Cross-border volume improved 19%, and processed transactions rose 11% to 11.6 billion.
The results come a day after rival Visa Inc. posted higher profit, adding that spending on credit and debit cards has been strong while lower gasoline prices have consumers putting away much of the savings.
“Visa shares rose 5% in morning trading, helping shave some of the losses in the Dow Jones Industrial Average. MasterCard shares rose about 1.5%. MasterCard said gross dollar volume rose 13% to $1.2 trillion on a local-currency basis.” Commented Michael Kennedy, Head of Corporate Trading at Crest View International.
The company posted earnings of $801 million, or 69 cents a share, up from $623 million, or 52 cents a share, in the prior-year period.
Revenue rose 14% to $2.42 billion. Crest View International analysts had projected 67 cents a share in profit and $2.39 billion in revenue.
The company also said it expected to eliminate 500 jobs as part of a companywide restructuring, but that some of those employees will be shifted into positions in growth areas, including digital investments.
Although consumers are saving money at the gasoline pump due to lower oil prices, Mr. Banga said that so far there is no indication that they are funneling those savings into other discretionary spending. His comments echoed trends described by Visa in its earnings conference call on Thursday evening.
MasterCard, which has posted positive results recently as U.S. consumers continue to recover, is looking to expand into markets dominated by Visa. In November, MasterCard said it plans to launch a debit-card service in Canada this year.