* Visa first-quarter EPS $1.92 vs est $1.81
* Visa operating revenue up 15 percent
* MasterCard first-quarter EPS $6.23 vs est $6.18
* MasterCard revenue $1.91 bln vs est $1.93 bln
By Tanya Agrawal
May 1 Visa Inc, the world's largest credit
and debit card network reported strong quarterly results as its
customers spent more on its cards, but smaller rival MasterCard
Inc reported a tougher quarter and warned of a difficult
Visa reported rising growth in the key U.S. market in
contrast to MasterCard, which has suffered as some of its
biggest issuers, including Citigroup Inc, struggle.
Visa stock rose 2.2 percent in after-hours trading while
shares in MasterCard, which reported earlier in the day, closed
down 2.4 percent on the New York Stock Exchange.
Both reported purchase volume increases of 9-10 percent from
a year earlier, after adjustment for currency fluctuations, but
MasterCard said its growth was slowing in the United States, the
Annual growth in MasterCard's U.S. purchase volumes eased to
4.6 percent from 7.1 percent in the previous quarter. Visa's
annual growth edged up to 4.1 percent from 3.0 percent. ()
As well, MasterCard was downbeat about coming months.
"In the U.S., the second quarter right now looks a little
bit dodgy, but there could be some upside going into the second
half of 2013 as far as U.S. economic growth is concerned,"
MasterCard Chief Executive Ajay Banga said on a post-earnings
Visa raised its fiscal 2013 earnings forecast to around 20
percent in earnings per share from a previous outlook for gains
in the high-teens.
Consumer sentiment across the globe has remained muted,
given the uncertainty in Europe and China's slowing growth. U.S.
consumer spending has taken a hit from higher payroll taxes.
MasterCard said it signed a memorandum of understanding with
China's Alibaba Group, Asia's largest e-commerce
company, to offer epayment services to potentially 800 million
Both MasterCard and Visa are trying to capture new business
as consumers turn increasingly to cards and digital payments
instead of cash.
They are also experimenting with mobile payments as they
fear losing business to upstart technology companies.
Digital wallets are electronic versions of real wallets that
store card and bank information and can be used to buy things
online quickly and anonymously. They are increasingly being used
on smartphones to shop in retail stores, posing a threat to
networks such as MasterCard, Visa and American Express.
Visa's net profit fell to $1.27 billion from $1.29 billion a
year earlier. But, on a per-share basis, profit rose to $1.92
per Class A share from $1.91, after share buybacks.
Total operating revenue rose 15 percent to $2.96 billion.
Analysts on average had expected a profit of $1.81 per share
on revenue of $2.85 billion, according to Thomson Reuters
MasterCard net income rose to $766 million, or $6.23 per
share, in the first quarter, from $682 million, or $5.36 per
share, a year earlier.
Analysts on average were expecting the company to earn $6.18
per share, according to Thomson Reuters I/B/E/S.
Revenue rose 8.4 percent to $1.91 billion but fell short of
the average analyst estimate of $1.93 billion.
Visa shares were up 2.2 percent at $169.64 in after market
trade on Wednesday.
MasterCard shares closed down 2.3 percent at $539.82 on
Wednesday. They had previously risen about 6 percent this year.