Mastercard Sticks by Forecast Even as Spending Growth Cools

01 May 2019, 04:00 AM IST

(Bloomberg) -- Mastercard Inc. is sticking by its outlook for 2019 even though spending growth on its cards slowed in the first quarter.

Adjusted net revenue this year will climb by a percentage in the “low teens” as expenses increase in the “high end of high single digits,” the company said Tuesday, reaffirming previous guidance.
Card spending climbed 12 percent through March to $1.48 trillion, just below the $1.49 trillion analysts in a Bloomberg survey were expecting and the slowest growth since the third quarter of 2017.

While Mastercard has been investing in its cross-border payments capabilities, the firm has warned that a stronger U.S. dollar as well as a drop-off in cryptocurrency purchases would cause overseas spending on its network to moderate. Those warnings finally came to fruition: Cross-border payments climbed just 13 percent in the quarter, the smallest increase in at least two years of data provided by the network.
Mastercard had to spend more to lure retailers and banks to use its products. The firm offered $1.74 billion in rebates and incentives, in line with the $1.73 billion average of analyst estimates compiled by Bloomberg.

Mastercard shares climbed 3 percent to $254.46 at 9:36 a.m. in New York. The shares have gained 35 percent this year, compared with the 27 percent advance of the S&P 500 Information Technology Index.

“We’re off to a very good start this year with strong revenue and earnings growth,” Chief Executive Officer Ajay Banga said in a statement Tuesday announcing first-quarter results.
Read the full statement here.

To contact the reporter on this story: Jenny Surane in New York at jsurane4@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson, Daniel Taub