MA MasterCard Incorporated

By Lisa Beilfuss 

MasterCard International Inc. said profit slid 6% in the first quarter as the card company offered increased rebates to grab customers and came up against a period that included a one-time tax benefit.

Still, results topped expectations. Shares edged 0.9% lower in early trading.

Like fellow card company Visa Inc., MasterCard charges fees to financial institutions for transactions that travel over their networks. Card companies have been shelling out in bids to attract new customers, in the face of more cautious consumer spending. Competitor American Express Co. similarly reported a first-quarter profit decline that it attributed to higher spending meant to win new customers.

Purchase, N.Y.-based MasterCards said transactions rose 14% during the quarter, helping to push revenue 9.7% higher from a year earlier. But while higher rebates and promotional activity helped the top line, such discounting bit into earnings.

Meanwhile, the strong U.S. dollar continued to dent results. The company said operating expenses rose by about a quarter to $1.1 billion, thanks largely to differences in foreign exchange hedging.

For the March quarter, MasterCard reported a profit of $959 million, or 86 cents a share, down from $1.02 billion, or 89 cents, a year earlier. The year-ago period included a benefit of 8 cents a share stemming from a one-time tax credit.

Revenue climbed to $2.45 billion. Analysts projected 85 cents in per-share profit on $2.38 billion in sales, according to Thomson Reuters.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

April 28, 2016 09:50 ET (13:50 GMT)

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