Mastercard Inc. has reported generating a better-than-expected profit, sending its shares up 3% for the first quarter. These shares were higher compared to last year in January and March.
Cross-border travel also surpassed 2019’s levels for the first time, although MasterCard claims that its consumers were still eyeing inflation and concerns about new Coronavirus variants. The company’s stock price rose by 5% in premarket trading.
The prolonged stay-at-home trends among Americans have helped boost cross-border travel in March. It was the first time that the travel industry has seen some strong growth since the COVID-19 pandemic began.
However, Mastercard stated that its decision to exit Russia could affect its performance from 2022 to 2024. The Russian market contributed about 4% of its total revenue in 2021, marking one of its biggest markets for the financial services company.
Mastercard Chief Financial Officer Sachin Mehra noted that the removal of Russia's revenues and the reduction of its operations in Ukraine could affect its annual revenue growth rate by about 2% points, maximum.
It is worth mentioning here that Mastercard’s cross-border volume, which measures the amount of money that consumers spend on cards outside of their country of origin, grew by 55% in March.
The finance major is the latest to report better than expected quarterly results compared to its rivals such as American Express and Visa. For the first quarter, the company earned USD 2.66 per share, surpassing the estimated USD 2.17, while its net revenue grew by almost 30%.
Despite the rise in cross-border spending, Mastercard noted that it has significantly observed a change in the behavior of its customers related to inflation. The company's gross dollar volume grew by 17% in the first quarter to reach almost USD 2 trillion. This metric represents the total value of all transactions that it possesses.
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