MasterCard Reports 4Q2008 Financial Results
MasterCard has announced financial results for the fourth quarter and full-year 2008.
"Net revenue for the fourth quarter of 2008 was $1.2 billion, a 14.2% increase versus the same period in 2007. Currency fluctuations (driven by movement of the euro and the Brazilian real relative to the U.S. dollar) tempered net revenue growth by 3.5 percentage points for the quarter. The higher net revenue in the fourth quarter versus the same period in 2007 was fueled by pricing changes, which contributed approximately 8 percentage points of the net revenue growth; and a 6.0% increase in the number of transactions processed, to 5.5 billion."
MasterCard's gross dollar volume in the US actually declined in the fourth quarter by 5.2% to $256 billion. US credit purchase volume was down 11% while debit was +6%. MasterCard dramatically reduced its advertising and marketing expenses by 32.8% in 4Q08 vs. 4Q07 - helping fuel an increase in operating margin from 16% to 38%.
MasterCard is holding an earnings call this morning. A copy of the earnings presentation for use on the call is available online.
MasterCard's gross dollar volume increased 3.4%, on a local currency basis, to $605 billion. Worldwide purchase volume during the quarter rose 3.1% on a local currency basis, versus the fourth quarter of 2007, to $455 billion, driven by modest growth in cardholder spending on a growing number of MasterCard cards. As of December 31, 2008, the company's financial-institution customers had issued 981 million MasterCard cards, an increase of 7.6% over the cards issued at December 31, 2007.
"Despite the significant economic turbulence around the world, we were able to achieve excellent fourth-quarter operating results while maintaining a healthy balance sheet, which is a strength in this environment," said Robert W. Selander, MasterCard president and chief executive officer. "Our 2008 full-year results reflect our unique business model and the value we provide to our financial-institution customers around the world."
Selander stated, "We remain committed to taking a prudent approach to our business to ensure effective cost management, while opportunistically investing to drive long-term growth for MasterCard and deliver value to our customers and shareholders. Our recent organizational realignment and our acquisition of Orbiscom, a leading payments solutions software provider, reflect that approach.
"The economic environment remains challenging, with businesses, governments and consumers around the world rethinking how finances are managed. One thing is certain in this new reality of increased financial management control --- the value and importance of electronic payments has never been greater," concluded Selander.
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