MasterCard Debit GDV Grew 10.7% in Q1, Shares dip 7%

Mastercard Incorporated (NYSE: MA) reports Q1 EPS of $2.80, 19 cents better than the analyst estimate of $2.61. Revenue for the quarter was $1.2 billion, versus the consensus of $1.21 billion. Shares have dipped over 7% in Friday's trading session.

Highlights From MA's Q1 Conference Call:

• (CEO) While our net revenues for the quarter declined 2.2% on an as reported basis, net revenue grew 1.8% on a constant currency basis.
• We have taken considerable cost reduction actions to deliver a strong operating margin of 48.6%, an improvement of 5 percentage points over Q1 of 2008 and the highest quarterly margin to-date that we recorded as a public company.
• (CFO) Q1 net revenues of 1.2 billion declined 2.2% over the comparable period last year. This decline was primarily driven by the unfavorable impact of foreign exchange and higher rebates and incentives partially offset by pricing, increased process transactions and increases of other payment related services.
• Worldwide debit GDV grew 10.7% for the quarter. This compares to about 17.8% growth in worldwide debit in the first quarter of last year, but is more inline with the growth on a sequential basis.
• The decline in gas prices on a year-over-year basis accounted for approximately 40% of the decline in U.S. purchase volumes. Gross dollar volumes were down 0.7% on a local currency basis or approximately 14% on a U.S. dollar converted basis.
• Looking now to process transactions, they increased 5.8% compared with the year ago quarter to 5.1 billion in the first quarter.
• The number of MasterCard's branded cards worldwide grew 4% to 967 million in the quarter and excluding the U.S., the rest of the world card issuance grew 12.1%.
• Cross-border volume fees decreased by11.3% versus Q1 '08. While cross-border volumes were essentially flat on a local currency basis, they declined by 14% on a U.S. dollar basis which impacted this revenue line.
• We generated $416 million in cash from operations and ended the quarter with cash and cash equivalents and current investments of 2.3 billion.
  

MasterCard Incorporated, together with its subsidiaries, provides transaction processing and related services to customers principally in support of their credit, deposit access, electronic cash and automated teller machine payment card programs, and travelers cheque programs.

MasterCard First Quarter Earnings, MasterCard, MC Shares, Debit Growth