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Jan 26 (Reuters) – MasterCard Inc ( MAN ) cut its quarterly revenue growth forecast short of Wall Street estimates on Thursday, saying it will slow ahead of a projected increase in travel demand.
The payments company’s travel to most regions has recovered to pre-pandemic levels as the economy loses steam in 2023, sending its shares up nearly 2% to $375.11 on fears of a tougher environment.
The economy is starting to show some signs of slowing after the Federal Reserve raised rates last year, amid fears of widespread job losses and a recession that will prompt consumers to save more, which could affect travel growth.
“Most regions are now at a point where they are growing at a healthy pace,” chief financial officer Sachin Mehra said, adding that Asia Pacific is different because it still has room. China reopens for growth.
“MasterCard payment volume growth remained strong in Q4 2022. The question is how long this momentum will last,” said Kevin Kennedy, analyst at Third Bridge Investment Research.
Cross-border traffic, which tracks spending on cards and is a measure of travel demand, rose 42% in the first three weeks of January.
But that growth was largely offset by low-origin debt last year when Omicron’s coronavirus spread, Jefferies analysts wrote in a note.
MasterCard said it expects first-quarter revenue to grow in the “high single-digit range,” while analysts had expected 10.7% growth, according to Refinitiv IBES data.
Competitive forecasts overshadowed the company’s earnings beat in the fourth quarter.
Excluding one-time items, MasterCard earned $2.65 per share for the three months ended Dec. 31, compared with analysts’ average estimate of $2.58.
Net income rose 12 percent to $5.8 billion.
Reporting by Niket Nishant in Bengaluru Editing by Vinay Dwivedi
Our standards: The Thomson Reuters Trust Principles.
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