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Mastercard Inc. was a hit with tourists last quarter.
Customers spent more with the firm’s plastic when they traveled abroad in the first three months of the year, aided by a weakening U.S. dollar. Cross-border volume on Mastercard’s network climbed 32 percent in the quarter, the Purchase, New York-based firm said Wednesday in a statement.
As cross-border spending climbed, the firm raised its guidance for full-year revenue growth to a percentage in the “low 20s.” It previously said revenue would grow at “the low end of high-double digits.”
Total spending on the firm’s network also climbed 20 percent to $1.04 trillion, topping the $1.01 trillion estimate from analysts at Oppenheimer & Co. Mastercard jumped 4.6 percent $188.60 at 9:03 a.m. before regular New York trading.
A weaker U.S. dollar boosts Mastercard’s profits outside the U.S., where the firm gets most of its revenue. The company has been lowering fees and sweetening rewards in a bid to ink card deals with banks, especially in Europe, where competition has intensified since Visa Inc.’s $20 billion purchase of Visa Europe in 2016.
Visa said last week that it also benefited from a weaker U.S. dollar in the first three months of the year as foreign spending in the U.S. increased at a double-digit pace for the first time in more than four years. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major currencies, dropped 3 percent during the quarter, the fifth consecutive quarterly drop.
Here are other key metrics from the quarter’s results:
- Net income rose to $1.49 billion, or $1.41 a share, from $1.08 billion, or $1, a year earlier. That exceeded analysts’ $1.24 average estimate.
- Operating expenses climbed 43 percent to $1.76 billion, the company said, driven in part by an increase in costs related to “strategic initiatives,” which include technology investments. That topped the $1.58 billion average of 12 analyst estimates compiled by Bloomberg.
- Mastercard spent $1.49 billion on rebates and incentives for banks to issue cards on its network in the quarter. That came in lower than the $1.54 billion analysts expected.
©2018 Bloomberg L.P.