Business

November 4, 2009

Lower costs boost MasterCard’s profit

STEPHEN BERNARD AP Business Writer

NEW YORK — MasterCard Inc. said Tuesday its third-quarter profit was bolstered by continued cost-cutting measures and an increase in the number of transactions it processed.

However, worldwide purchase volume grew only 0.4 percent on a local currency basis during the quarter, providing further evidence that a global economic recovery is likely to be slow. Volume fell in the U.S.

“The economic downturn has continued to affect consumer and business spending during the quarter,” Robert Selander, MasterCard’s CEO, said during a conference call with investors. “We don’t expect any global economic improvement until sometime in 2010.”

But, Selander did note that there have been some signs of stabilization in recent months and the worst of the downturn is likely over.

MasterCard’s revenue edged up to $1.36 billion from $1.34 billion a year ago.

Lazard Capital Markets analyst David Parker said in a research note that revenue should return to “double-digit growth in the next few quarters,” as economic concerns ease.

While purchase volume remained relatively unchanged, the number of transactions MasterCard processed during the quarter jumped 8 percent to 5.8 billion.

The bigger jump in processed transactions than purchase volume indicates customers are spending less on each purchase as concerns about an economic recovery keep spending in check.

Martina Hund-Mejean, MasterCard’s chief financial officer, said in an interview with The Associated Press that customers are increasingly switching from using cash and checks to debit cards, fueling growth in that area of payments.

Spending fell the most in the U.S., where purchase volume declined 7 percent to $204 billion. Canada was the only other region MasterCard reported a decline in purchase volume.

Tweet	Follow @TLnews