MasterCard Incorporated (NYSE: MA) today announced financial results for the first quarter of 2012. The company reported net income of $682 million, up 21%, and earnings per diluted share of $5.36, up 25%, in each case versus the year-ago period.
Net revenue was $1.8 billion, a 17% increase versus the same period in 2011. On a constant currency basis, net revenue increased 19% compared to the same period in 2011. Net revenue growth was driven by the impact of the following:
- An increase in cross-border volumes of 18%;
- An 18% increase in gross dollar volume on a local currency basis, to $849 billion; and
- An increase in processed transactions of 29%, to 7.7 billion.
These factors were partially offset by an increase in rebates and incentives primarily due to new and renewed agreements and increased volumes.
Worldwide purchase volume during the quarter was up 17% on a local currency basis versus the first quarter of 2011, to $629 billion. As of March 31, 2012, the company's customers had issued 1.8 billion MasterCard and Maestro-branded cards.
"We had a good start to the year with solid first quarter results driven by an increase in processed transactions, the highest quarterly growth rate since our IPO, as well as positive volume growth in all regions as consumers continue to adopt electronic payments," said Ajay Banga, MasterCard president and chief executive officer. "We are leveraging opportunities around the world. In the U.S., we have significantly improved our position in debit and now have the capability to process transactions on about half of all U.S. debit cards. Outside of the U.S., the acquisitions of DataCash and Access Prepaid Worldwide are delivering growth, both showing roughly 25% operational increases."
Total operating expenses increased 14%, to $758 million, during the first quarter of 2012 compared to the same period in 2011. Excluding the impact of foreign currency, operating expenses grew 15%. The increase was primarily driven by higher general and administrative expenses. Excluding the acquisition of Access Prepaid, net revenue grew approximately 16% and operating expenses grew approximately 9%.
MasterCard's effective tax rate was 31.8% in the first quarter of 2012, versus a rate of 32.8% in the comparable period in 2011. The decrease was primarily due to a more favorable geographic mix of earnings this year.
During the first quarter of 2012, MasterCard repurchased 652,500 shares at a cost of approximately $248 million. Quarter-to-date through April 26, the company repurchased an additional 112,300 shares of class A common stock at a cost of approximately $49 million, with $556 million remaining under the current repurchase program authorization.
Read the full statement here.