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How Mastercard Beat Earnings, Revenue Estimates in 3Q17

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How Mastercard Beat Earnings, Revenue Estimates in 3Q17 PART 1 OF 8

How Mastercard Beat Earnings, Revenue Estimates in 3Q17

Strong numbers

Mastercard (MA) reported its 3Q17 earnings on October 31, 2017. EPS (earnings per share) came in at $1.34, which was above Wall Street analysts’ estimate of $1.23. That implies a YoY (year-over-year) rise of 23%.

How Mastercard Beat Earnings, Revenue Estimates in 3Q17

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The YoY rise in EPS can be mainly attributed to a favorable operating performance. However, in 3Q17, share repurchases by the company contributed $0.04 to EPS.

Mastercard reported a profit margin of 38.3% in 3Q17. Its peers (XLF) Discover Financial Services (DFS), Western Union (WU), and Visa (V) reported profit margins of 32.3%, 3.5%, and 36.5%, respectively.

Beating revenue estimates

In 3Q17, Mastercard managed to report revenues that were higher than the estimates. Its revenues were $3.4 billion, while the analyst estimate was $3.3 billion. That’s a YoY rise of 18%.

The rise came on the back of a rise in cross-border volumes and gross dollar volumes. However, acquisitions and the rise in switched transactions also contributed to the YoY rise.

Mastercard’s top management has made security a priority. It thus saw a 20% YoY rise in its 3Q17 operating expenses.

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