Mastercard Inc.’s card volume rose more than expected as consumers continued to flock to overseas travel destinations and other entertainment options.
(Bloomberg) — Mastercard Inc.’s card volume rose more than expected as consumers continued to flock to overseas travel destinations and other entertainment options.
Purchase volume on the firm’s cards jumped 13.5% to $1.84 trillion, Purchase, New York-based Mastercard said Thursday in a statement. That beat the $1.83 trillion average of analysts’ estimates compiled by Bloomberg.
“The same air ticket which used to cost $800 to go overseas in the past is now costing $1,500, and the consumer is still spending on it,” Chief Financial Officer Sachin Mehra said in an interview. “There’s strong wage growth, there’s still high savings levels and markets across the globe are doing pretty well. You bring all that together and you have consumers who are feeling pretty good.”
Revenue for the quarter climbed 14%, helping boost profits to $2.8 billion, or $3 a share. That topped the $2.82 average of estimates compiled by Bloomberg.
Consumers have defied analysts’ expectations as they continue to spend more on travel and entertainment even a year after being freed from pandemic-era restrictions. At Mastercard, spending tied to overseas travel is currently at 154% of pre-pandemic levels, Chief Executive Officer Michael Miebach said in the statement.
Mastercard rival Visa Inc. said earlier this week that spending on its cards jumped, also crediting higher volumes tied to travel.
Despite the better-than-expected results, Mastercard only reiterated a previous forecast that adjusted revenue would climb by a percentage in the “low teens” while costs would increase by “a high-end of high-single digits” percentage.
Shares of Mastercard slipped 2% to $394.50 in New York trading Thursday. They’ve gained 13% this year, more than the 2.4% increase for the S&P 500 Financials Index.
(Updates with CFO comment in third paragraph, shares in last paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.