MasterCard Conference Call Highlights

MasterCard Inc MA reported its third quarter earnings on Wednesday. Shares of the company are up 9 percent.

Below are some key highlights from its conference call.

Financial Progress:

• We had a good third quarter.
• We saw net revenue growth of 13%, along with net income and EPS growth rates of 15% and 19% respectively.
• So we delivered another quarter of strong results and we have continued the momentum you've seen from us over the course of this year.
• Net revenue growth was 13%.
• This combined with operating expense growth of 12% and a lower tax rate resulted in a 15% increase in net income.
• EPS growth was 19%, and share repurchases contributed $0.04 per share.
• During the third quarter, we purchased 5.3 million shares at a cost of approximately $400 million.
• Through October 23, we repurchased an additional 1.7 million shares at a cost of approximately $120 million.
• Processed volume outside the U.S. grew 16%, about 2 PPT higher than the third quarter.

International:

• SpendingPulse data showed sustained growth over the course of 2014.
• U.S. retail sales, ex-automobiles, in the third quarter were up 4.2% and that was a higher number than the second quarter growth of 3.8%.
• However, the monthly growth trend showed some deceleration with several sectors: Lodging, Furniture, Furnishings, Grocery, experiencing some noticeable slowdowns in September.
• So these are mixed trends in the U.S.
• Europe's recovery slowed in the third quarter.
• Annual PCE growth projections have been revised down from 3.5% to 3.1%.
• SpendingPulse data for the U.K. also showed third quarter retail sales, ex-auto growth, slowed to 2.9% down from the 4.8%.
• Consumer confidence, economic sentiment also down slightly, but unemployment levels continued to show improvement across the region.
• MasterCard's total European volume growth for the third quarter was in the low-teens and processed transaction growth in the high-teens, about the same as the last quarter.
• Region's growth was driven been by a number of countries, including Russia, Turkey and Sweden.
• In Latin America, our third quarter SpendingPulse data for Brazil showed retail sales growth of 2.4%, down from 4.1% in the second quarter.
• Across the region, annual GDP growth expectations were also revised down from 2.3% to 1.3%.
• The primary exception in this whole thing is Mexico, where they continue to benefit from improving exports to the U.S., and our business in the region remains solid.
• Third quarter GDV and processed transaction growth is in the mid-teens, again, about the same as last quarter.
• In Asia Pacific, there is a decline in business sentiment in the third quarter, mostly because of everybody being concerned about the economic slowdown of China.
• But consumer confidence held steady.
• And our business in the region continues to do well. GDV growth in the mid-teens, processed transaction growth in the mid 20's in the third quarter, down slightly from last quarter.
• We're also seeing progress in countries such as Canada, in Turkey, in Poland.
• And just recently in the U.K. we worked with Transport for London to expand contactless payments to the Underground.
• In South Africa, our prepaid program manager, Access Prepaid Worldwide is working with the VAT refund administrator of the South African revenue service to migrate their single currency refund card to a full currency MasterCard prepaid program

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