Currency tailwinds, noted by this author in a recent post, are now evident to both the management of MasterCard as well as the investment community at large. In a filing with the SEC, MasterCard management indicates a view that revenue will accelerate sharply in 2017. Previously, guidance indicated a revenue growth forecast of just over 10%. Roughly 70% of MasterCard’s revenue is generated in currencies other than the US dollar.
Prepare for a significant earnings revision by analysts in the weeks ahead.
On a related note, Visa Inc. (V-NYSE, $104.96) had more recently added the European operating division of VISA through an acquisition. Visa has now consolidated the income statement and balance sheet. This adds an important source of foreign currency to the total revenue stream. Anticipate a tailwind on Visa revenues for the balance of the year.