MasterCard Tumbles After Earnings Miss

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Shares of MasterCard Inc. (NYSE: MA) tumbled 8% in early trading Friday after the company reported fourth-quarter and full-year 2013 results before markets opened.

For the quarter, the credit services company posted diluted earnings per share (EPS) of $0.57 on revenues of $2.13 billion. In the same period a year ago, the company reported adjusted EPS of $0.69 on revenues of $1.90 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for $0.60 EPS and $2.14 billion in revenues.

The period included a $61 million after-tax charge related to the opt-outs in the U.S. merchant litigations. Adjusted to include the charge, EPS came to $0.52.

For the full year, MasterCard posted EPS of $2.56 on revenues of $8.34 billion, compared with consensus estimates calling for EPS of $2.64 and revenues of $8.36 billion. Revenues rose almost $1 billion year-over-year and EPS was up more than 14%.

The company’s CEO said:

We are very pleased with our performance this quarter and our full-year 2013 results reflect the overall strength of our global business. … In addition to signing several significant deals last quarter, we made new investments in processing and person-to person payments while expanding our MasterPass digital platform — all supporting safe and seamless payment experiences.

Worldwide purchase volume for the quarter was up 12% year-over-year on a local currency basis to $805 billion. The company delivered an operating margin of 47.7% for the quarter and 55.1% for all of 2013.

MasterCard said it repurchased 9.8 million shares of Class A common stock in the fourth quarter, as well as 41 million shares for the full year at a cost of approximately $2.4 billion.

The report did not offer guidance, but the consensus forecasts so far call for EPS of $0.74 and revenue of $2.15 billion in the current quarter, as well as $3.11 per share and $9.38 billion for the full year.

MasterCard shares fell as low as $72.56 in early trading Friday. The 52-week range is $50.74 to $84.75. Thomson Reuters had a consensus analyst price target of around $88.76 before the report.

Shares of Visa Inc. (NYSE: V) and American Express Co. (NYSE: AXP) were down about 1% in morning trading.

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