NEW YORK (Reuters) - MasterCard Inc (MA.N), a credit and debit card processor, said it expects double-digit revenue growth for 2008, and boosted its long-term profit outlook and the company’s shares rose to record high levels.
MasterCard said it expects average annual net income growth of 20 percent to 30 percent in 2009, 2010, and 2011, compared with its prior estimates of 15 percent to 20 percent.
The company is benefiting from the rise of plastic globally as more consumers use credit and debit cards to pay for goods and services.
“There’s a huge opportunity to convert cash and check transactions into electronic payments,” said Martina Hund-Mejean, chief financial officer of MasterCard, in an interview with Reuters.
Credit and debit cards account for only about 5 percent of payment activity globally.
MasterCard’s shares rose 7.7 percent, or $22.11, to $309. MasterCard’s stock has surged 700 percent since the 2006 initial public offering at $39 apiece.
Visa Inc’s (V.N) shares rose 4 percent to $85.25. Visa went public earlier this year.
According to slides in a MasterCard presentation for investors, in the first eight weeks of the second quarter, the company saw transaction volume growth in dollar terms in the United States, albeit at a slower pace. Growth in the rest of the world increased, leading to a net increase in total growth.
With overall growth strong, the company said it expects double-digit revenue growth for 2008. The company posted revenue of $4.1 billion in 2007, and according to Reuters Estimates, analysts expect $4.9 billion in 2008.
The second-largest credit-card network in the world said it expects average annual net revenue growth of 12 percent to 15 percent, higher than its prior estimates of 8 percent to 10 percent.
In January, MasterCard has said it was reconsidering its prior guidance for long-term growth. The company has consistently surpassed the long-term earnings growth forecasts originally set out in 2006.
Reporting by Dan Wilchins; editing by Maureen Bavdek and Carol Bishopric