Stimulus Check – Mastercard profit beats estimates on spending, travel boost
(Reuters) –Mastercard Inc reported a second-quarter profit on Thursday that comfortably beat estimates, underpinned by a recovery in global spending as businesses start to reopen and travel shows signs of a rebound.
The company’s cross-border volumes, which track spending on its cards beyond the country of issue, rose 58% on a local currency basis, driven by a pickup in international travel. The volumes had plunged 45% in the same period a year earlier.
“International travel is still in the early stages of recovery and represents additional upside potential,” Chief Executive Officer Michael Miebach said.
Mastercard saw improved strength in travel between the Unites States and Latin America, as well as an increase in travel within Europe, Miebach said on a conference call.
U.S. consumer spend on airlines improved significantly since the early part of the quarter and volumes were now back to pre-pandemic levels, Chief Financial Officer Sachin Mehra said.
Cross-border travel in Asia Pacific has been slower to recover, Mehra said, adding that travel comeback in Asia is hard to predict due to the spread of coronavirus variants.
Consumer spending saw a spike during the quarter due to massive government stimulus packages, sending Mastercard’s gross dollar volumes, or the dollar value of the transactions processed, up 33% on a local currency basis to $1.9 trillion.
Net income, excluding exceptional items, rose to $1.9 billion, or $1.95 per share, from $1.4 billion, or $1.36 per share a year earlier.
Analysts on average had expected a profit of $1.75 per share, according to Refinitiv IBES data.
Reporting by Sohini Podder in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta