MasterCard posts 2Q loss, adjusted results beat estimatesAssociated Press
NEW YORK – MasterCard Inc., which went public in May, reported a second-quarter loss on Wednesday as the world’s second-largest credit card brand took charges related to its initial public offering and legal defense reserves.But its results after stripping out unusual items surpassed Wall Street projections.The Purchase, N.Y.-based company reported a loss of $310.5 million, or $2.30 per share. A year earlier when MasterCard was still a private entity owned by the nation’s largest banks, it earned $120.2 million.Excluding charges related to its IPO and the donation of 13.5 million shares to a foundation it operates, the company reported a profit of $101 million, or 74 cents per share. That beat Wall Street projections for earnings of 62 cents per share, according to analysts polled by Thomson Financial.Shares of the company rose $3.93, or 8.7 percent, to $48.93 in afternoon trading on the New York Stock Exchange, approaching its high of $50.63.”Business performance, coupled with our network, brand and unique payment solutions, really makes us confident we are positioned for future growth,” said President and Chief Executive Robert Selander. “I think the second quarter was a good indicator that we are on the right path.”MasterCard said in March that it would post a significant loss because of a donation to the MasterCard Foundation, a charity founded as part of the company’s listing on the New York Stock Exchange. The company dedicated 13.5 million shares to the charitable foundation, and also put $23 million into its legal reserves as part of ongoing litigation.Higher purchases on its credit and debit cards worldwide pushed revenue up 9.7 percent to $846.5 million from $771.9 million a year earlier. Analysts had projected revenue at $801.08 million, according to Thomson Financial.The amount of money charged using the company’s cards rose 16 percent during the quarter to $485 billion. Meanwhile, total transactions increased 18 percent. MasterCard said banks issued 796 million cards as of June 30, an increase of 11 percent from the year-ago period.Selander also said the company is continuing to make strides in overcoming a number of legal hurdles in both Europe and the U.S., including litigation over how much it charges merchants in transaction fees and anti-competitive business practices.Last week, both Mastercard and larger rival Visa USA reached a $336 million agreement over charges for foreign currency conversions. MasterCard had established legal reserves of $89.27 million to cover the currency conversion cases.—On the Net:http://www.mastercard.com
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