Mastercard Expenses Rise 12% in Wake of 2019 Acquisition Spree

(Bloomberg) -- Mastercard Inc.’s appetite for deals is getting costly.

The payments network has inked deals for half a dozen companies since the start of the year, a spree that included its largest takeover ever: a unit of Nets for $3.19 billion. The string of acquisitions contributed to a 12% jump in third-quarter costs.

Key Insights

• Expenses increased to $1.81 billion, compared with the $1.85 billion average of analyst estimates compiled by Bloomberg, the Purchase, New York-based company said Tuesday in a statement.
• The acquisitions haven’t changed the company’s outlook for the year. Mastercard said it still expects expenses to climb by a percentage in the mid single digits, while revenue is likely to increase by a percentage at the “high end of low double digits.”
• Mastercard joined its rival Visa Inc. in setting aside more in client incentives to lure banks to issue their cards on its network. Such rebates rose 20% to $2.09 billion, topping the $2.04 billion average estimate.
• Fees from cross-border transactions rose 13% to $1.52 billion, matching estimates. Investors have been keeping a closer eye on cross-border spending as the stronger U.S. dollar this year has crimped commerce into the U.S.

Market Reaction

• Mastercard shares rose 0.9% to $278.50 in early trading in New York at 8:06 a.m. The stock climbed 46% this year through Monday, outpacing the 35% advance of the 68-company S&P 500 Information Technology Index.

Get More

• Read Mastercard’s full statement announcing third-quarter results here.

To contact the reporters on this story: Jenny Surane in New York at jsurane4@bloomberg.net;Gwen Everett in New York at geverett10@bloomberg.net

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

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