Everyone saw
Visa 's (NYSE: V)
earningslast week, so there really wasn't much excitement
over
MasterCard 's (NYSE: MA) earnings this week.
These companies are so similar that operating results of one
aren't likely to diverge far from the other.
MasterCard's net income for the third quarter came in at
$452 million, or $3.45 per share. That was up from a loss of
$1.48 per share in the same period last year, but
last year'sresults held one-time litigation payments to
Discover Financial (NYSE: DFS) and
American Express (NYSE: AXP). Visa had to do
the same last year after Discover and AmEx accused Visa and
MasterCard of bullying banks into issuer exclusivity. Visa
and MasterCard still dominate cards issued by big banks like
Bank of America (NYSE: BAC) and
Citigroup (NYSE: C), although the dominance
isn't quite exclusive. B of A, for example, now issues a card
in conjunction with American Express.
But back to MasterCard. Here's how the most important
statistic -- dollar volume -- fared over the past several
quarters:
Period
Gross Dollar Volume Growth
Q3 2009
(4.7%)
Q2 2009
(9.3%)
Q1 2009
(9.8%)
Q4 2008
(4.4%)
Q3 2008
15.3%
Q2 2008
18.5%
Q1 2008
20.0%
Now, these growth rates are calculated on a U.S. dollar
basis. However, MasterCard does a big chunk of its business
overseas. If calculated on a local currency basis, volume
would have been about flat in the most recent quarter. All of
this means is that the global consumer is healthier than this
table shows, but it doesn't show up for MasterCard investors
since that strength gets washed out by currency conversions.
This, though, isn't likely to last for long, especially if
you expect the U.S. dollar to weaken over the long term. And
who among us doesn't?
Plus, just like Visa, total processed transaction growth
is still humming along:
Period
Total Processed Transaction Growth
Q3 2009
7.6% Continued... |