Yahoo Finance

Mastercard Inc.'s MA fourth-quarter 2021 earnings of $2.35 per share beat the Zacks Consensus Estimate of $2.19. The same was up 43% from $1.64 per share a year ago.

This leading payment network company’s net revenues of $5,216 million surpassed the Zacks Consensus Estimate of $5,133 million and increased from $4,120 million a year ago.

The strong fourth-quarter results were heavily supported by a significant recovery in consumer spending, thanks to relaxed COVID-related restrictions. Increased usage of the company’s cards, Switched transactions and cross-border volumes buoyed the results.

It expects the spending to further improve in the coming days. With consumers, governments, businesses and other market stakeholders adapting fast to the changing environment, MA expects more growth in 2022. The planned acquisition of Dynamic Yield is expected to add to its service capabilities across digital channels.

Mastercard Incorporated Price, Consensus and EPS Surprise

Mastercard Incorporated price-consensus-eps-surprise-chart | Mastercard Incorporated Quote

Q4 Operational Performance

Gross dollar volume (representing the aggregated dollar amount of purchases made and cash disbursements obtained from MasterCard-branded cards) rose 23% from the prior-year quarter to $2.1 trillion. Cross-border volumes (a key measure that tracks spending on cards beyond the issuing country) grew 53% on a local-currency basis, with cross-border spending above pre-pandemic levels. The increase in international travel played a crucial role in this regard.

Switched transactions, which indicate the number of times a company’s products are used to facilitate transactions, were up 27% year over year to 31,371 million. This shows that customers used MA cards more frequently in the quarter.

Other revenues grew 28% year over year. This included a 9% increase from acquisitions. The remaining growth was driven primarily by Cyber & Intelligence and Data & Services solutions. Rebates and incentives grew 37%, driven by higher growth in volume and transactions and new and renewed deals, which partially offset the growth in net revenues.

Clients issued 3 billion Mastercard and Maestro-branded cards as of Dec 31, 2021.

Total operating expenses for the fourth quarter jumped to $2,389 million from the year-ago figure of $2,062 million, primarily due to increased general and administrative as well as advertising and marketing costs.

Operating income for the December quarter was $2,827 million, up from $2,058 million a year ago. Adjusted operating margin increased to 54.2% for the fourth quarter from the year-ago period’s 51%.