Summary
Mastercard Inc. reported strong financial performance for the second quarter and the first six months of 2014. Net revenue saw a significant increase of 13% and 14% respectively, year-over-year, driven by growth in domestic assessments, cross-border volume fees, and transaction processing fees. This top-line growth translated into a robust net income increase of 10% for the quarter and 12% for the six-month period, demonstrating effective operational leverage. The company's balance sheet reflects a solid financial position, although cash and cash equivalents decreased compared to the prior year-end, partly due to substantial share repurchases. Operating expenses, while increasing, were managed effectively, with total operating expenses as a percentage of net revenue remaining stable. Mastercard also continued its commitment to returning capital to shareholders through dividends and significant share repurchases, underscoring a positive outlook and confidence in its business model. The company also addressed ongoing legal matters, particularly the U.S. merchant class litigation, with a significant reserve in place.
Financial Highlights
53 data points| Revenue | $2.37B |
| Operating Expenses | $985.00M |
| Operating Income | $1.38B |
| Interest Expense | $15.00M |
| Net Income | $931.00M |
| EPS (Basic) | $0.80 |
| EPS (Diluted) | $0.80 |
| Shares Outstanding (Basic) | 1.17B |
| Shares Outstanding (Diluted) | 1.17B |
Key Highlights
- 1Net revenue increased by 13% for the three months ended June 30, 2014, and 14% for the six months ended June 30, 2014, compared to the respective prior-year periods.
- 2Net income grew by 10% to $931 million for the three months ended June 30, 2014, and by 12% to $1,801 million for the six months ended June 30, 2014.
- 3Diluted earnings per share increased by 14% to $0.80 for the quarter and 16% to $1.53 for the six-month period.
- 4Mastercard repurchased approximately $2.8 billion of its Class A common stock during the first six months of 2014.
- 5The company issued $1.5 billion in new debt (2.000% Notes due 2019 and 3.375% Notes due 2024) in March 2014.
- 6General and administrative expenses increased by 20% for the quarter and 15% for the six months, primarily due to higher personnel expenses.
- 7The company maintained a substantial accrued liability of $799 million for U.S. merchant class litigation and anticipated opt-out merchant cases as of June 30, 2014.