By Michael Calia And Robin Sidel
MasterCard Inc. said its fourth-quarter profit jumped 29% as the
credit-card company posted higher purchase volume and revenue.
The results, which beat analyst expectations, come as the
picture steadily brightens for U.S. consumers, while global
economic uncertainties are heightened by a strengthening dollar and
falling oil prices.
"Despite a mixed global economy, we delivered solid results for
the quarter and for the full year in 2014," Chief Executive Ajay
Banga said in a news release Friday.
Purchase volume rose 12%, in terms of local currency, to $858
billion.
Cross-border volume improved 19%, and processed transactions
rose 11% to 11.6 billion.
The results come a day after rival Visa Inc. posted higher
profit, adding that spending on credit and debit cards has been
strong while lower gasoline prices have consumers putting away much
of the savings.
Visa shares rose 5% in morning trading, helping shave some of
the losses in the Dow Jones Industrial Average. MasterCard shares
rose about 1.5%.
MasterCard said gross dollar volume rose 13% to $1.2 trillion on
a local-currency basis.
The company posted earnings of $801 million, or 69 cents a
share, up from $623 million, or 52 cents a share, in the prior-year
period.
Revenue rose 14% to $2.42 billion. Analysts had projected 67
cents a share in profit and $2.39 billion in revenue, according to
Thomson Reuters.
The company also said it expected to eliminate 500 jobs as part
of a companywide restructuring, but that some of those employees
will be shifted into positions in growth areas, including digital
investments.
It wasn't immediately clear how many of the company's roughly
10,000 employees would be laid off.
MasterCard's report comes more than a week after Mr. Banga told
The Wall Street Journal that he is seeing good credit trends in the
U.S. as banks and consumers move with caution during the
recovery.
Although consumers are saving money at the gasoline pump due to
lower oil prices, Mr. Banga said that so far there is no indication
that they are funneling those savings into other discretionary
spending. His comments echoed trends described by Visa in its
earnings conference call on Thursday evening.
MasterCard, which has posted positive results recently as U.S.
consumers continue to recover, is looking to expand into markets
dominated by Visa. In November, MasterCard said it plans to launch
a debit-card service in Canada this year.
Write to Michael Calia at michael.calia@wsj.com and Robin Sidel
at robin.sidel@wsj.com
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