Visa and Mastercard hit quarterly revenue estimates despite COVID-19

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Despite tough trade winds, both Visa and Mastercard have been able to post good quarterly results.

Visa and Mastercard hit quarterly revenue estimates despite COVID-19

Shares of Mastercard rose after it posted Q1 earnings that exceeded expectations. Adjusted earnings per share totalled $1.83 in the quarter, up from $1.78 a year earlier and above analysts’ average forecast of $1.72, according to FactSet.

Revenue registered $4 billion in the latest quarter, up 3{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} from $3.9 billion a year earlier and above analysts’ prediction of $3.96 billion. GAAP net income totaled $1.7 billion in the latest quarter, or $1.68 a share, down from $1.9 billion, or $1.80, a year earlier.

The COVID-19 pandemic, which has crimped global spending, didn’t help matters. “Covid-19 has made this a very trying time for everyone,” comments Ajay Banga, Chief Executive, Mastercard. “Although there will be twists in the road, we have seen early signs of spending levels stabilising and are confident that we will emerge from this even stronger.”

Similarly, Visa came out with quarterly earnings of $1.39 per share, beating the Zacks Consensus Estimate of $1.35 per share. This compares to earnings of $1.31 per share a year ago. These figures are adjusted for non-recurring items.

Visa reported a 4{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} rise in Q2 profit and pulled its full-year outlook, as the company reels from the hit to consumer spending due to the COVID-19 pandemic. For the second quarter, the company’s total payments volume rose 5{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to $2.14 trillion, on a constant dollar basis, with its largest market United States representing 46{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} of the total volume.

Net income rose 4{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to $3.08 billion in the second quarter ended March 31 from $2.98 billion a year earlier. Net revenue rose 7{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to $5.85 billion, beating analysts’ estimates of $5.75 billion, according to Refinitiv IBES data.

This quarterly report represents an earnings surprise of 2.96{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}. A quarter ago, it was expected that this global payments processor would post earnings of $1.46 per share when it actually produced earnings of $1.46, delivering no surprise.

Over the previous four quarters, the company has surpassed consensus EPS estimates three times.

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