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Market Update

Earnings on Tap: MasterCard

MasterCard looking to charge ahead of last year's results.


 MasterCard (MA) will be announcing fourth-quarter results Thursday morning before markets open with earnings per share expected to be $4.79 compared with $0.15 per share reported in the year-ago quarter.

The global payments company posted increased profits during the last three quarters. For the most recent one, MasterCard's profits topped Wall Street estimates on the back of rising consumer spending in the U.S., where MasterCard earns around 40% of its revenue. Net income was 7.7% higher at $772 million, or $6.17 per share.

MasterCard operates the second-largest, open-loop card network in the world. Its clients are financial institutions that issue MasterCard cards to their clients and process card transactions. Morningstar equity analysts think that connecting thousands of financial institutions through a card network garners MasterCard a wide economic moat, and it is one of the few companies set to benefit from the global shift toward electronic modes of payment.

The stock has surged nearly 15% during the last three months and is presently trading at a premium to Morningstar's fair value estimate.

Gazala Parveen does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.