MasterCard Results Top Expectations as Transactions Grow

MasterCard Inc. said profit and revenue grew in the second quarter as transactions increased at the credit card company.

Results topped expectations, and shares climbed 1.8% premarket.

Like fellow card company Visa Inc., MasterCard charges fees to financial institutions for transactions that travel over their networks. Card companies have been shelling out in bids to attract new customers and increase transactions.

Purchase, N.Y.-based MasterCard said transactions rose 14% during the quarter but said that was partly offset by higher rebates and incentives.

Operating expenses increased 15% to $1.31 billion in the quarter, due to higher general and administrative, marketing and legal expenses.

In all, MasterCard reported a profit of $983 million, or 89 cents a share, up from $921 million, or 81 cents, a year prior. On an adjusted basis, earnings per share were 96 cents. Revenue rose 13% to $2.69 billion. Analysts polled by Thomson Reuters expected 90 cents in per-share profit on $2.59 billion in sales.

MasterCard is expanding from the traditional physical credit and debit cards as its customers move to digital formats. MasterCard is expanding its Masterpass digital payment platform to let shoppers use the service on their mobile phones at store check-out terminals, creating another rival to Apple Inc.'s Apple Pay and a number of other mobile-payment products.

Earlier this month, MasterCard said it was buying most of VocaLink Holdings Ltd., a bank-owned technology company in the U.K. that provides the backbone for non-card transactions such as employer payroll deposits and consumer bill payments, for about $920 million.

Write to Austen Hufford at [e-mail]

(END) Dow Jones Newswires

July 28, 2016 09:15 ET (13:15 GMT)

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