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Mastercard's profit beats estimates on resilient consumer spending
Oct 31, 2024 5:38 AM

(Reuters) -Payments processor Mastercard ( MA ) reported a better-than-expected profit for the third quarter on Thursday, as customers encouraged by economic stability ramped up their spending.

The report rounds out a busy earnings week for payments firms, which are being closely scrutinized to assess the state of the health of the U.S. consumer.

Although some have flagged a slowdown, spending levels remain elevated compared with last year as wage growth and hopes of a soft landing spur consumer confidence.

Trends so far also indicate that diversified businesses covering cards, mobile payments, peer-to-peer transactions and value-added services such as fraud protection have been more resilient.

Revenue from Mastercard's ( MA ) payment network jumped 11%. Value-added services and solutions fetched 19% more than last year and accounted for 37% of Mastercard's ( MA ) total revenue.

"These results reflect healthy consumer spending and ongoing solid demand for our value-added services and solutions," CEO Michael Miebach said.

Shares rose 1.4% before the bell. They have gained 20% this year, outperforming rival Visa but trailing the benchmark S&P 500 index.

Spending in October held up. Cross-border volume, a gauge of travel demand that tracks spending on cards outside the country of their issue, climbed 18% compared with last year.

Switched volume, which measures the value of transactions processed on Mastercard's ( MA ) network, also grew 11%.

Excluding one-time costs, Mastercard ( MA ) earned $3.89 per share compared with expectations of $3.74, according to estimates compiled by LSEG.

Profit rose 2% to $3.3 billion for the three months ended Sept. 30. Revenue grew 13% to $7.4 billion.

The company took a $190 million restructuring charge in the quarter as it reduces headcount to streamline operations and concentrate resources on key areas.

(Reporting by Niket Nishant and Vedant Vinayak Vichare in Bengaluru; Editing by Arun Koyyur)

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