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MarketScreener Homepage  >  Equities  >  Nyse  >  Mastercard Incorporated    MA

MASTERCARD INCORPORATED

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Mastercard Incorporated : Revenue Hurt by Distancing, Border Restrictions -- Update

10/28/2020 | 04:33pm EST

By Allison Prang

Credit-card companies Mastercard Inc. and Visa Inc. reported double-digit declines in their revenue Wednesday, as the pandemic continued to weigh on results.

Mastercard's revenue fell 14% from a year earlier to $3.84 billion, hurt by a steep dive in cross-border volume, meaning payments cardholders make outside of the country where the card was issued. Cross-border volume on a local-currency basis tumbled 36%.

Chief Financial Officer Sachin Mehra said the drop in those volumes was "due to the effects of border restrictions and social distancing measures." Mastercard's revenue missed the estimate of $3.95 billion from analysts polled by FactSet.

"As travel starts to come back, we'll see personal travel...come back sooner than business travel," Mr. Mehra said on the company's earnings call. "And that should be tied to how we see the evolution of the Covid vaccine and the therapeutics taking place."

"While we have seen some improvement in travel within the [European Union] during the quarter, cross-border travel outside the EU has shown only limited recovery," Chief Executive Ajay Banga said.

Mastercard logged $1.51 billion in profit and said earnings were $1.51 a share. That compares to net income of $2.11 billion, or $2.07 a share, a year earlier. Adjusted earnings were $1.60 a share. According to FactSet, analysts were expecting $1.65 a share.

Shares of Mastercard, which reported results before the market opened Wednesday, fell 8.1% to $291.38 a share.

Visa's revenue tumbled 17% to $5.1 billion, but was still above the analyst consensus from FactSet of $5 billion. Cross-border volume fell 29% on a constant-dollar basis.

"Overall cross-border spending remains depressed, led by travel spending, as the majority of borders remain closed," the company said.

Visa said earnings were $2.14 billion, down 29% from a year earlier. Earnings were 97 cents a share and adjusted earnings were $1.12 a share. According to FactSet, analysts were expecting adjusted earnings of $1.09 a share.

Shares of Visa rose 0.35% in after-hours trading.

While travel is taking a hit from the coronavirus pandemic, contactless payments are growing in popularity. Contactless penetration was 41% of in-person purchase transactions in the third quarter, Mastercard President Michael Miebach said. In the second quarter, it was 37%, and a year ago it was 30%, he said.

"We believe that as the economies reopen, people will shop in stores again. But e-commerce will remain elevated from pre-pandemic levels as behaviors have changed and payment preferences have shifted," Mr. Miebach said.

American Express Co., which reported results last week, logged a 69% drop in travel and entertainment spending.

Write to Allison Prang at allison.prang@wsj.com

(END) Dow Jones Newswires

10-28-20 1732ET

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Financials (USD)
Sales 2020 15 210 M - -
Net income 2020 6 149 M - -
Net Debt 2020 1 493 M - -
P/E ratio 2020 55,3x
Yield 2020 0,44%
Capitalization 338 B 338 B -
EV / Sales 2020 22,3x
EV / Sales 2021 18,9x
Nbr of Employees 18 600
Free-Float 62,2%
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Technical analysis trends MASTERCARD INCORPORATED
Short TermMid-TermLong Term
TrendsBullishNeutralBullish
Income Statement Evolution
Consensus
Sell
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Mean consensus BUY
Number of Analysts 37
Average target price 353,16 $
Last Close Price 339,07 $
Spread / Highest target 22,4%
Spread / Average Target 4,15%
Spread / Lowest Target -14,2%
EPS Revisions
Managers
NameTitle
Ajaypal S. Banga Chief Executive Officer & Director
Michael E. Miebach President & Chief Executive Officer-Elect
Richard Neil Haythornthwaite Chairman
Edward McLaughlin President-Operations & Technology
Sachin J. Mehra Chief Financial Officer
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