IPO Costs Push MasterCard Into The Red

PURCHASE, N.Y. -- MasterCard Worldwide reported a net loss of $310 million, or $2.30 a share, Wednesday for its second quarter, related to the creation of its charitable foundation as part of its May initial public offering. The cards company donated 13.5 million Class A shares to the foundation as part of the IPO and the $395 million value of the donation is not tax deductible. Otherwise, MasterCard reported a 10% rise in revenues for the quarter to $846 million, compared to the second quarter last year. Second quarter results also include the addition of $23 million in reserves for potential settlements of ongoing suits; and $7 million in interest income earned on IPO proceeds used to redeem Class B shares. Total operating expenses increased by 93% for the quarter, due to the contributions to the MasterCard Foundation; and increase in advertising and marketing expenses related to the company's sponsorship of the World Cup soccer tournament. For the first six months of the year, MasterCard reported a loss of $184 million, or $1.36 a share, due mainly to the charitable foundation shares. Revenues rose almost 11% for the first half, to $1.6 billion, compared to the first six months last year.