MasterCard reported total card growth of 10.8% for fiscal 2015.
The highlights were as follows.
Reports Q4 (Dec) earnings of $0.79 per share, $0.10 better than the Capital IQ Consensus of $0.69; revenues rose 4.4% year/year to $2.52 bln vs the $2.55 bln Capital IQ Consensus. Adjusted for currency, net revenue increased 9%.
•Net revenue growth was driven by the impact of the following: •A 12% increase in gross dollar volume, on a local currency basis, to $1.2 trillion
•An increase in processed transactions of 12%, to 13.0 billion and
•An increase in cross-border volumes of 12%.
•These factors were partially offset by an increase in rebates and incentives, primarily due to new and renewed agreements and increased volumes.
• Worldwide purchase volume during the quarter was up 12% on a local currency basis versus the fourth quarter of 2014, to $883 billion.
•Operating income for the fourth quarter of 2015 increased 9%, or 17% adjusted for currency, versus the year-ago period. The company delivered an operating margin of 44.0%.
A point that certainly deserved to be prominently mentioned in the call; MasterCard issued 153 million new credit cards in the last fiscal year. That number of issuances is more than 2X the number of new cards added by Visa for that same period. MasterCard’s issuance rate was almost exclusively in credit cards; their lower margin debt card business actually declined in size moderately. American Express, by way of comparison, reports a TOTAL of just 112 million total cards throughout its system.
Mull that point over; MasterCard added, in just one year, almost 136% MORE new cards than Amex, a long held Buffett favorite, has in its entirety.
Such a growth rate in issuances, which are almost exclusively in the higher margin credit cards, all else being equal, seems to suggest that Mastercard has the potential for positive earnings surprises in the coming fiscal year. Much of this should be back-ended to the second half of 2016.
Visa reported total card growth of 5.1% for the trailing four fiscal quarters. In contrast with MasterCard, the reported growth rate was primarily in debit cards.