MasterCard insulates profit fall
(5 May 2009 – USA) MasterCard has recorded a fall in first quarter profits to US$367 million, insulated by a heavy focus on increasing its operating margin.
Net income for the quarter fell by 18.3 percent to US$367 million for the first three months of 2009, from US$447 million for the same period in 2008.
The slowdown in profit generation by the card company can primarily be attributed to swings in foreign exchange, lower investment income and a slowdown in card spending.
Net revenues decreased slightly compared to the first quarter of 2008, dropping from US$1.18 billion to US$1.16 billion, a fall of just 2.2 percent.
MasterCard’s gross dollar volume was up a slight 0.3 percent, on a local currency basis, versus the first quarter of 2008, to US$550 billion.
The credit card giant recorded worldwide purchase volumes during the quarter of US$411 billion, up 0.3 percent on a local currency basis versus the first quarter of 2008. The number of processed transactions increased 5.8 percent compared to the same period in 2008, to 5.1 billion.
As of March 31, 2009, the company’s financial-institution customers had issued 967 million MasterCard cards, an increase of 4.0 percent over the cards issued at March 31, 2008.
MasterCard indicated that it was able to reduce expenses to counter the slowdown in revenue in the current climate.
On the reduced profit results, Robert W. Selander, MasterCard president and chief executive officer said that the company has taken considerable cost-reduction actions allowing it to deliver an increased operating margin of 48.6 percent, while still keeping focused to ensure it is well positioned for long-term growth.
The operating margin is up 5.0 percentage points over the same period last year.
The slowdown in profit generation by the card company can primarily be attributed to swings in foreign exchange, lower investment income and a slowdown in card spending.
Net revenues decreased slightly compared to the first quarter of 2008, dropping from US$1.18 billion to US$1.16 billion, a fall of just 2.2 percent.
MasterCard’s gross dollar volume was up a slight 0.3 percent, on a local currency basis, versus the first quarter of 2008, to US$550 billion.
The credit card giant recorded worldwide purchase volumes during the quarter of US$411 billion, up 0.3 percent on a local currency basis versus the first quarter of 2008. The number of processed transactions increased 5.8 percent compared to the same period in 2008, to 5.1 billion.
As of March 31, 2009, the company’s financial-institution customers had issued 967 million MasterCard cards, an increase of 4.0 percent over the cards issued at March 31, 2008.
MasterCard indicated that it was able to reduce expenses to counter the slowdown in revenue in the current climate.
On the reduced profit results, Robert W. Selander, MasterCard president and chief executive officer said that the company has taken considerable cost-reduction actions allowing it to deliver an increased operating margin of 48.6 percent, while still keeping focused to ensure it is well positioned for long-term growth.
The operating margin is up 5.0 percentage points over the same period last year.
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