MasterCard releases new quarterly results

1 August 2008

Credit card operator MasterCard has posted a $747 million loss for the second quarter.

A charge from an out-of-court settlement with rivals American Express pushed the firm into negative growth, despite a nine per cent rise in profits elsewhere.

Rising spending from cardholders also led to MasterCard enjoying a 25 per cent boost in sales for the three-month period.

Excluding the AmEx charge, MasterCard would have earned $276 million over the quarter.

The 12.8 per cent growth in spending volume for the firm over the second quarter is overshadowed by figures posted in 2007, which showed a 13.3 per cent rise.

This drove shares in the company down six per cent in pre - market trading following the announcement.

Speaking to CNBC, Cowen analyst Moshe Katri commented: "This stock is very expensive, and people own it based on its earnings power and its ability to meaningfully beat estimates."

MasterCard - which went public two years ago and is therefore obliged to post trading updates - is the world's second-largest credit card network, after Visa.

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