MasterCard Cools on Warning

PURCHASE, N.Y. – Shares in MasterCard, which have been among the hottest on Wall Street since last May’s initial public offering, slumped 10% Friday to close at $103.60, after the company warned that operating margin growth may slow this year. The credit card giant, which has seen its shares almost triple in value since the IPO, reported net income of $40.1 million, or 30 cents for the fourth quarter, compared to a loss of $452.9 million, or 39 cents a share, for the same quarter last year, when litigation costs accrued from the company’s massive settlement of an antitrust case with Wal-Mart Stores and other retailers. Fourth quarter revenues surged 17% to $839.2 million, as the number of transactions conducted over the world’s second largest payments network also rose 17% compared to the same quarter last year. But company officials warned Friday that the 3% rise in operating margins in 2006 will be tough to match in 2007, spurring a sell-off in the company’s shares. For the full year, MasterCard reported a 13% rise in revenues, to $3.3 billion, and but a decline in net income of 81%, to $50.2 million, or 37 cents a share, compared to 2005, because of $395 million in costs to donate 13.5 million shares to a new non-profit foundation as part of its IPO.