By Aparajita Saha-Bubna
Of DOW JONES NEWSWIRES
MasterCard Inc. (MA) repeated a warning that revenue growth in 2009 will fall short of its long-term objective of an average increase in net revenue of 12% to 15% through 2011.
The company expects earnings to grow 20% this year, excluding severance charges, said Martina Hund-Mejean, MasterCard's chief financial officer, during a conference call Tuesday morning to discuss the company's third-quarter results.
"I think the worst is behind us," said Robert Selander, MasterCard's chief executive officer, during the conference call, but the economic rebound would likely be less robust than what the company hopes for.
MasterCard's shares recently traded at $211.43, about 5.5% lower on the day. The shares have gained about 47% so far this year.
Earlier in the day, the Purchase, N.Y. company posted a quarterly profit of $452.2 million as the company processed more transactions, continued to cut expenses and benefited from a slowdown in the pace of decline in consumer spending.
Unlike traditional credit card-issuers, MasterCard and bigger rival Visa Inc (V) are insulated from credit woes arising from increasing delinquencies because they don't lend to consumers. MasterCard and Visa make money from the fees they charge banks, including JPMorgan Chase & Co. (JPM) and Citigroup (C), to process card payments on the plastic these banks issue. These financial institutions are among the top issuers of MasterCard- and Visa-branded cards.
The more consumers charge on their MasterCard and Visa plastic, the more these two companies earn by way of fees.
-By Aparajita Saha-Bubna, Dow Jones Newswires; 617-654-6729; aparajita.saha-bubna@dowjones.com