IMGCAP(1)]
MasterCard Inc. yesterday reported a net loss of $194 million for the third quarter, compared with net income of $314.5 million for the same period last year. That translates to a $1.49 loss per diluted share, compared with $2.32 earnings per diluted share last year. Net revenue during the quarter, which ended Sept. 30, was $1.34 billion, up 24% from $1.08 billion last year. Total operating expenses were $1.62 billion, up 122% from $729.5 million last year. MasterCard's settlement of an antitrust lawsuit with Discover Financial Services (CardLine, 10/28) added a one-time, tax-affected charge of $515.3 million to MasterCard's litigation expenses during the quarter; otherwise the network would have earned $322 million net income, or $2.47 per diluted share, during the quarter, Martina Hund-Mejean, MasterCard chief financial officer, told analysts during a conference call yesterday evening. Robert Selander, MasterCard president and CEO, said the current economic crisis is unlike any the company has encountered. "When we faced the last economic downturn in the United States, we saw unemployment begin to rise," Selander said during the conference call. "Housing was driving the recovery, the financial institutions were in good shape, the financial markets were functioning and there was very limited commodity inflation. ... This time around, there are fewer economic and financial levers to be pulled." Selander noted decreased spending by consumers and financial institutions alike, and he added that MasterCard is cutting its own spending. The network has implemented a hiring freeze and is reducing expenses from contractors, suppliers, consultants and travel, according to Selander. "We are using resources in a more thoughtful and efficient manner while trying to ensure that we remain well positioned for future growth," he said.
