MasterCard, the second-biggest payments network, posted first-quarter profit that beat analysts' estimates as customer spending increased.
Net income rose 14 percent to $870 million, or 73 cents a share, from $766 million, or 62 cents, a year earlier, the Purchase, New York-based firm said today in a statement. The average estimate of 31 analysts surveyed by Bloomberg was for adjusted profit of 72 cents a share.
Chief Executive Officer Ajay Banga is boosting dividends and repurchasing shares as MasterCard benefits from a global shift from cash and checks to electronic forms of payment. The payments network collects the majority of its revenue outside the U.S.
"We kicked off the year with a strong quarter, despite a mixed global economy," Banga, 54, said in the statement. "We continue to invest in technology and acquisitions that will speed our development of mobile and online solutions."
Revenue increased 14 percent $2.18 billion, the company said, topping the $2.14 billion estimate of analysts in the Bloomberg survey. Worldwide purchase volume growth was 13 percent, fueled by spending in Latin America, Asia and Europe. Operating expenses increased 12 percent to $892 million as the company spent more on advertising and marketing.
MasterCard gained 1.2 percent to $74.40 at 8 a.m. in early trading in New York. The shares slid 12 percent this year through yesterday, compared with the 1.9 percent advance of the Standard & Poor's 500 Index.
During the quarter, MasterCard repurchased about $1.7 billion of shares, the firm said.
Visa, the biggest payments network, said April 24 that first-quarter profit increased 26 percent to $1.6 billion as revenue gains missed expectations.
American Express, the biggest U.S. credit-card issuer by purchases, said last month that quarterly net income rose 12 percent to $1.43 billion, exceeding analysts' expectations. Discover Financial Services, based in Riverwoods, Illinois, reported April 22 that first-quarter profit slid 6.2 percent to $631 million.
Visa shares have dropped 9 percent this year, compared with a 3.6 percent decline for AmEx and less than 1 percent for Discover.