MA ==> The Astros Winner

[mrmarket]

MasterCard Q2 Earnings Top on Higher Revs, Margins Dip

By Zacks Equity ResearchJuly 31, 2014 10:09 AM













MasterCard Inc. (MA) reported second-quarter 2014 operating earnings per share (EPS) of 80 cents. The results comfortably exceeded both the Zacks Consensus Estimate of 77 cents and the year-ago quarter figure of 70 cents. With this result, the company’s average four-quarter beat stands at 5.3%.
Operating net income rose 9.8% year over year to $931 million. No special items were recorded during the comparable periods.
Results reflected increased number of processed transactions and strong gross dollar value (GDV) growth, partially offset by higher operating and tax expenses. Notably, the negative factors also led to deterioration in operating margin and cash flow.

Mastercard Incorporated - Quarterly EPS (:BNRI) | FindTheBest

Quarterly Details
Net revenue jumped 13.4% year over year and 13% on constant currency basis to $2.38 billion, and breezed past the Zacks Consensus Estimate of $2.3 billion. The upside was primarily due to a 12% rise in the number of processed transactions to 10.6 billion along with 16% increase in cross-border volumes. These were partially offset by higher rebates and incentives, primarily attributable to new and renewed business alliances.
During the reported quarter, GDV increased 13% to $1.1 trillion, while worldwide purchase volume rose 13% year over year, on a constant currency basis, to $821 billion. As of Jun 30, 2014, MasterCard had issued over 2.0 billion MasterCard and Maestro cards.
Total operating expenses rose 14.5% year over year to $994 million. The overall increase primarily resulted from a surge of 32.8% in depreciation and amortization expenses and 19.2% uptick in general and administrative expenses. These were partially offset by 7% decline in advertising and marketing expenses.
Subsequently, operating income increased 12.6% year over year to $1.38 billion in the reported quarter. However, operating margin dipped to 58.2% from 58.6% in the year-ago quarter. Additionally, interest expense rose 200% year over year to $15 million. MasterCard's effective tax rate was 32.2%, higher than 31.2% in the year-ago period.
Financial Update
As of Jun 30, 2014, MasterCard’s net operating cash flow plunged 19.6% year over year to $1.3 billion, primarily owing to higher investments in acquisitions and strategic initiatives.
At the end of Jun 2014, cash and cash equivalents decreased to $2.88 billion from $3.6 billion at 2013-end, while long-term debt stood at $1.49 billion against nil debt at 2013-end. In Mar 2014, MasterCard raised about $1.49 billion from its bond sale – the first ever executed by the company.
Meanwhile, retained earnings increased to $11.67 billion at the end of Jun 2014 from $10.12 billion at 2013-end. Moreover, total equity declined to $6.3 billion from $7.5 billion at Dec 2013.
Share Repurchase Update
During the reported quarter, MasterCard repurchased about 15.7 million shares for $1.2 billion. Until Jul 24, 2014, the company bought back another 1.4 million shares for $106 million.
On Dec 10, 2013, the board of MasterCard sanctioned a new share repurchase program worth $3.5 billion. The company has about $728 million worth of stock available under this latest share repurchase program.
Dividend Update
On May 9, 2014, MasterCard paid its quarterly dividend of 11 cents per share to shareholders of record as on Apr 9. This was hiked by 83% in Dec 2013, marking the second hike in 2013. Previously, MasterCard had increased its dividend annually by 100% each in the February of 2013 and 2012.

[billyjoe]

MA will be a big winner. I'm willing to wait.

----------------billy

[billyjoe]

Here comes MA. JeJeJe!

------------billy

[jiesen]

MA will be a big winner. I'm willing to wait.

----------------billy

they're ALL gonna be winners! just you wait...

[mrmarket]

Warren Buffet is a tool...but I agree with him on this pick:

Warren Buffett's Portfolio: Why Visa and MasterCard Will Charge Higher


BYBret KenwellFollow|
11/18/14 - 05:15 PM EST|

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Stocks in this article: VMAAAPLEBAYBRK.ABRK.B
Find out if (MA) is in Cramer's Portfolio.

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NEW YORK (TheStreet) -- Are investors getting caught up in the new world of digital payment methods, such as Apple's (AAPL) Apple Pay and eBay's (EBAY) PayPal? Some may be but not famed investor Warren Buffett.
According to the latest 13F filing with the Securities and Exchange Commission, Buffett'sBerkshire Hathaway (BRK.B) upped its stake in credit card behemoths Visa (V) andMasterCard (MA) .
Must Read: 7 Stocks Warren Buffett Is Selling in 2014



While some may believe that credit card use will end with the digital wallet, quite the opposite is seen for these two companies, said TheStreet's Jack Mohr.

MasterCard MA data by YCharts
Visa and MasterCard are partnered with Apple on the company's Apple Pay venture, and stand to "profit handsomely" on the transactions, he explained. The modern wallet is far from dead, as Apple Pay simply stores the same credit card information on the user's phone.
The secular shift remains strong as more and more consumers ditch checks and cash for credit and debit cards. Buffett realizes this trend will continue for some time, which is likely one of his reasons for boosting his stake.

Visa V data by YCharts

It's also likely Buffett sees an uptick in consumer spending on the horizon as the economy improves, Mohr added.
He noted 46 million merchants accept Visa and 36 million merchants accept MasterCard. The companies' global payment network is part of what makes them so successful and the number of merchants is expected to increase.
Shares of both MasterCard and Visa traded poorly for most of the year until reporting third-quarter earnings. Both companies surprised analysts by beating on top and bottom lines ahead of the lucrative fourth quarter.
"Visa and MasterCard are incredibly consistent payment processors riding a long-term theme," Mohr concluded.

[billyjoe]

Mr.Market, I bought MA when you did and several more times on dips. I've already made my 15% and see no reason to sell, maybe forever. MA is a throwback to the olden days when you bought your Bethlehem Steel, General Motors etc. and held it for life. Unfortunately members of my family bought those 2 generations ago and lost everything. If MA starts weakening I'll sell. Will be another great day when Mr.Market pockets 15% on this one.

------------------billy

[mrmarket]

I see a lot of hot plastic being used over the next 6 weeks

[bigtruck]

This is always a good sign:

http://finance.yahoo.com/news/mastercards-xmas-gift-45-dividend-190002822.html

[billyjoe]

MA or V, or both ? http://finance.yahoo.com/news/master...174105671.html MA still looks good especially after latest earnings

http://finance.yahoo.com/news/visa-v...171005960.html With the 4/1 split V is tempting

-----------------billy

[drutzen]

maybe the spark that lights the fire

as a costco amex card carrying shopper, i have to disagree with his statement below that basically says costco shoppers are as loyal to costco as they are amex. ha.... I will switch cards in a heartbeat to whatever costco chooses.

American Express Says Costco Pact to End Next Year -- 4th Update
1:26p ET February 12, 2015 (Dow Jones) Print
American Express Says Costco Pact to End Next Year -- 4th Update
By Robin Sidel
American Express Co. said its 16-year-old exclusive relationship with warehouse club Costco Wholesale Corp. will end next year, dealing a blow to the card company that has already been falling short of its revenue goals.
The loss was unusually significant for the New York company, as Costco cards account for one out of every 10 AmEx cards in circulation and 20% of the company's loan portfolio. The move led Chief Executive Ken Chenault to hold a conference call with analysts to discuss the expected negative impact to the company's earnings for the coming two years, as well as its plans to counteract the loss.
AmEx, which issues credit and charge cards and owns a processing network, said it had been unable to reach a new agreement with Costco on terms that "would have made economic sense" for the company.
"It's not easy to see a long-standing partnership end, but when the numbers no longer add up it's the only sensible outcome," Mr. Chenault said in a conference call with analysts.
The news battered AmEx shares, which fell 6% to $80.82 in afternoon trading.
Co-branded Costco cards represent 8% of AmEx customers' world-wide spending, said Jeffrey Campbell, AmEx's chief financial officer. Another 1% of spending comes from other types of AmEx cards that are used at Costco, he said.
Costco had $110 billion in sales in its fiscal year that ended in August.
Costco is one of the few big U.S. merchants that only accepts AmEx cards. Credit cards branded by Visa Inc., MasterCard Inc. and Discover Financial Services can't be used at Costco warehouse stores. Costco, however, does accept debit cards from Visa and MasterCard.
AmEx said the pact would end on March 31, 2016. AmEx will discontinue its TrueEarnings cards that are branded with the Costco logo and offer new types of cards to those customers.
Customers who have other AmEx cards also won't be able to use them at Costco, which is expected to soon reach a new deal with another card company.
A spokesman for Costco declined to comment on its plans to replace the AmEx arrangement.
The end of the Costco relationship represents the latest setback for AmEx, which once was known as a status symbol for the affluent but is now under attack from competitors like J.P. Morgan Chase & Co. that are also going after wealthy Americans. AmEx is now trying to expand into other areas, such as pitching prepaid cards for low-end consumers and getting more small businesses to accept its cards. The strategy will likely take years to pay off.
Costco has long been one of AmEx's biggest partners. AmEx also has a big exclusive arrangement with Delta Air Lines Inc., which it renewed last month.
Such partnerships, called "co-brands," are established to build loyalty among specific types of customers. Cardholders often receive extra perks when they use co-branded cards, while card companies and the merchant typically see higher levels of spending on those cards.
AmEx's partnership with JetBlue Airways Corp. is also expected to end soon, but that is a far smaller relationship than Costco or Delta, according to a person familiar with the arrangements.
Mr. Chenault said the Costco pact's end would have a negative impact on revenue and earnings per share in 2015 and 2016. "We believe we have a number of different ways to drive growth going forward," he said, referring to the company's recent expansion into prepaid debit cards and other strategies.
AmEx will pursue efforts to convince the holders of the Costco branded cards to use other AmEx products. Mr. Chenault said that about 70% of spending on the Amex-Costco-branded cards is done in places other than at the warehouse club.
"They are AmEx customers as much as they are Costco customers," Mr. Chenault said.
Mr. Chenault said he is confident that the company will be able to achieve its earnings-per-share growth target of 12% to 15% in the "moderate to long term" without the Costco arrangement.
"We will invest in other opportunities that we think can generate greater returns over time," he said in the conference call.
Meanwhile, earnings per share are now expected to be "flat to modestly down" in 2015 compared with 2014 and then return to growth in 2016, Mr. Campbell said.
The dissolution of the partnership comes just a few months after AmEx and Costco ended their similar arrangement in Canada. Costco now has a partnership in Canada with MasterCard and Capital One Financial Corp.
Mr. Chenault said the end of the Costco deal could help raise AmEx's so-called discount rate, which is the amount that merchants pay for each transaction. Co-branded partnerships typically give the merchant a break on that rate as part of an incentive for doing the deal.
AmEx announced last month it was eliminating 4,000 jobs. The move came as part of an effort to control expenses amid a shortfall in revenue targets.
AmEx is awaiting a judge's verdict in a federal antitrust case that took place last summer. The Justice Department sued AmEx over its merchant rules, contending that they inhibit competition.
AmEx has said its policies aren't anticompetitive. It has also said it could suffer a "material adverse effect on our business" if it loses the case.

[billyjoe]

MA slowly keeps going up. You can sleep soundly with this one in your port. I've got +20% in one account and +14% in another....and these have not been the best of times for MA. What a company !

------------------billy

[billyjoe]

Still waiting for the next big move. I'm not as patient as Mr.Market. That 3% per transaction X millions sure ads up. Not about to sell MA soon.

-----------------billy

[billyjoe]

MA could be #55 the way it has moved today. I wasn't expecting quick acceleration on this one. It's proving me wrong.

---------------billy

[tiedyed1]

MA and V have HUGE momentum now that they can start applying for local operations in China as of June 1.

Now adding China, who knows where the revenue will go?!!
I am holding this one.

[jiesen]

Just a few cents left, and we'll be there... to 94.5 and another winner with MA! Yes, it's been a year, but just don't forget to sell this one and lock in your 15% when it gets there... as it surely will very soon.

I was reminded about MA when I noticed a $0.16/shr dividend showing up in my account today! Can't forget those, either, when you figure out how much you made on this one... it all adds up!