MasterCard Plunges Despite Strong Financials

PURCHASE, N.Y. – Shares of MasterCard Inc. , among the hottest stocks over the past year, plummeted more than 12% before recovering yesterday on widespread credit fears, even after the company reported strong profits for its second quarter. The cards company reported net income for its second quarter of $252.3 million, or $1.85 a share, compared to a second quarter loss last year of $310.5 million, related to its going public. Second quarter revenues rose a strong 18% to $997 million, fueled by a 15% increase the number of transactions for its cards and a 13% growth in the dollar volume of transactions. For the first two quarters of the year MasterCard reported a 21% rise in revenues, to $1.9 billion, and net income of $467.2 million, or $3.44 a share, compared to a loss of $183.7 million, or $1.36 a share, for the first half last year. Last year’s second quarter included a $395 million charge related to the donation of stock to a new charitable foundation created in conjunction with the company’s initial public offering last May. MasterCard shares have been among the hottest issues since then, quadrupling from their $39 IPO price to more than $160. MasterCard shares closed down 7% yesterday at $150.