MasterCard Exceeds Expectations, Gets Small Bump

When you think of credit cards, the most widely accepted worldwide happen to be MasterCard (NYS: MA) and Visa (NYS: V) . They share the spotlight today with earnings releases, though Visa will check in after hours with its results. MasterCard, however, was one of the companies that reopened the New York Stock Exchange after Sandy with its earnings this morning. Let's take a look at how they did.

What analysts were expecting
MasterCard went into this morning having exceeded expectations for four consecutive quarters, and the earnings beat continued this quarter. With analysts expecting a 5% climb to $5.93 per share, MasterCard checked in with an 8% gain to $6.17 a share. Revenues, however, were off slightly from expectations, coming in at $1.9 billion against the expected $1.94 billion. Overall, it was a great quarter for MasterCard.

What happened this quarter
A large factor in driving earnings higher was an increase in total processed transactions, which increased by 24% to 8.7 billion. This was helped partially by an expansion into the Czech Republic , opening its services to another part of Eastern Europe. Also impressive is the 1.9 billion cards that have been issued by MasterCard's customers through the end of the quarter. We'll have to check out Visa's earnings this afternoon to see if MasterCard is closing the gap, or if Visa is still leading the market.

While Visa was in the news earlier this week for raising its dividend, MasterCard maintained its dividend at its current level. However, it did repurchase 500,000 shares during the third quarter, spending $216 million in the process. In addition to its ongoing dividend of $0.30 a quarter, it will also be returning value to shareholders over the next few quarters, with $1.1 billion remaining under its current share repurchase program.

Though it didn't make the list yet, MasterCard is dedicated to returning value to shareholders through the use of dividends and share repurchases. In this vein, he Motley Fool has compiled a special free report outlining our nine top dependable dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here to discover the winners we've picked.

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Robert Eberhard has no positions in the stocks mentioned above. Follow him on Twitter for the occasional tweet about the market. The Motley Fool owns shares of MasterCard. Motley Fool newsletter services recommend Visa. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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