MasterCard Inc. (NYSE:MA) was a big mover after reporting impressive fourth-quarter and full-year earnings that topped Wall Street expectations. After coming under pressure amid a contraction in cross border volumes, the payment giant was still able to grow overall transactions conversely post a quarterly profit.
Q4 Financial Results
The company reported net earnings of $1.6 billion or $1.64 billion slightly lower than a $2 billion profit or $1.96 a share reported a year earlier. In contrast, the analyst expected the company to report earnings of $1.51 a share. The stock jumped 3% as investors reacted to earnings topping estimates.
For the full year, net income was down 21% to $6.4 billion as revenue fell 9% to $15.3 billion. Operating expenses remained flat as operating margins tanked 4.4 basis points but still up at 52.8%. The decline came as the company battled the effects of COVID-19.
Year over year decline in earnings could be attributed to, among other things, a slump in travel demand and discretionary. The travel industry is on its death bed in the aftermath of the pandemic, a development that has taken a toll on MasterCard Cross border payment volumes.
Cross-border volume was down by 29% in the quarter. Likewise, net revenue took a hit dropping 7% to $4.1 billion. Amid the COVID-19 shocks, MasterCard was still able to drive growth in the overall volume that was up 1% to $1.7 trillion.
MasterCard Outlook
According to Chief Executive Officer, Michael Miebach, effective vaccines' availability should be a catalyst in averting further slowdown going forward. Likewise, the company has inked strategic partnerships worldwide as it continues to strengthen its payment empire.
MasterCard has also completed the acquisition of Fincity expected to strengthen the Open Banking portfolio further. There is also a growing focus in enriching the digital experience and strengthen security and trust expected to strengthen the competitive edge needed to position the company for the future.
MasterCard was one of the best-performing stocks in 2019 returning more than 19% conversely beating the S&P 500.