|Friday, 31 July 2015 13:59
|MasterCard revenues disappoint analysts
Despite offering more rebates and incentives
MasterCard Inc has reported lower-than-expected quarterly revenue as the company offered more rebates and incentives to win new and renewed deals.
Shares of MasterCard, which operates the world's second largest payment network, fell about 3 percent in premarket trading on Wednesday.
The company paid $940 million in rebates and incentives in the second quarter, up 21 percent from a year earlier. Client incentives accounted for nearly 28 percent of MasterCard's gross revenue in the second quarter, way above Visa's 16 percent.
MasterCard's cross-border volumes - the value of transactions made by card holders outside the card-issuer's country - jumped by 17%.
The company's net income fell to $921 million in the quarter ended June 30 from $931 million, a year earlier, due to a $44 million after-tax charge related to a UK merchant litigation settlement. However, earnings rose on a per-share basis to 81 cents from 80 cents.
Excluding the charge, MasterCard earned 85 cents per share.
Net revenue rose 0.9 percent to $2.39 billion.
Up to Tuesday's close, the stock had risen 10.5% this year, while Visa's shares had risen 14%.