MasterCard Keeps Rolling; Seventh Earnings Beat in a Row

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MasterCard (MA) rose 5.6% in early trading after beating analysts’ expectations for the seventh quarter in a row, and reporting that cardmembers continue to increase spending.

MasterCard posted $4.03 of EPS, 12 cents higher than analysts had been expecting. Spending on MasterCards jumped 16% and processed transactions rose 23%.

MasterCard rebounded strongly in 2011 after some difficulty in 2010 related to new federal rules that lowered fees that merchants pay when customers use debit cards. The rules are expected to benefit MasterCard somewhat, because they are expected to weaken Visa’s (V) hold on the debit card market.

The company took a one-time $495-million after-tax charge to account for a possible settlement of pending litigation brought by merchants alleging that the card processors fixed merchant fees. That case is likely to go to trial or get settled this year.



Original Article Source by Barrons.com