Mastercard shares fall as credit card giant Q1 revenue outlook misses estimates

By Scott Kanowsky 

Investing.com -- Shares in Mastercard Inc (NYSE:MA) slipped on Thursday after the payment card company forecast revenue growth in the first quarter that missed Wall Street estimates.

The firm said it expects revenue in the initial three months of 2023 to increase in the "high-end of high-single digits" range, according to Reuters. Analysts had penciled in current-quarter top-line growth of 10.7%.

The guidance comes after Mastercard reported better-than-expected fourth-quarter profit following what it described as "remarkably resilient" consumer spending in the face of spiking living costs.

Adjusted diluted earnings in the final three months of 2022 jumped by 13% year-on-year to $2.65 per share, above Bloomberg consensus estimates of $2.58. Net income moved up 6% to $2.5 billion.

“As we look at the broader economy, we see the continued recovery of cross-border travel, [...] and we’re encouraged by Asia opening up further," said chief executive officer Michael Miebach in a statement. However, he added that "macroeconomic and geopolitical uncertainty persist."

Net revenue rose by 12% to $5.8B, thanks in part to a 31% surge in cross-border volume. This was partly offset by total operating expenses, which increased by a tenth due to higher personnel costs and investments in "strategic initiatives across payments, services and new network capabilities."

Despite a dip in retail sales in the U.S. in December, red-hot inflation has benefitted Mastercard because, as a payments processor, it charges fees for each transaction at a similarly elevated level.