Mastercard (NYSE:) shares opened lower on Wednesday after the company printed its fiscal first quarter, reporting worse-than-expected revenue and operating margin.
The payments processing giant reported first-quarter earnings per share (EPS) of $3.31, ahead of consensus estimates of $3.24. However, the company's revenue of $6.3 billion is slightly lower than the expected $6.34 billion.
Operating margin for the quarter was 56.8%, lower than the expected 58.3%.
The total dollar volume also missed expectations, reaching $2.29 trillion compared to the expected $2.32 trillion.
Looking ahead, MasterCard now expects second-quarter net revenue to reach the high end of growth.
For the full year, it expects net revenue to grow in the low double digits.
“Our momentum continued this quarter, as we delivered strong revenue and profit growth supported by healthy consumer spending, strong cross-border volume growth of 18%1 year-over-year, and new deal wins in every region,” said Michael Maibach. CEO of MasterCard.
“We are driving growth in electronic payments by scaling innovative technologies like tokenization. That's why people choose Mastercard – for a simple, seamless and secure way to pay.
After the earnings release, analysts at Mizuho said in a research note that overall results were strong with April U.S. payment volumes slowing slightly less than Visa. However, they note that new headwinds in the currency market during the second quarter and full year led to lower GAAP guidance compared to previous expectations, weighing on the stock today. However, Mizuho reaffirmed its Buy rating on MA.
Elsewhere, Goldman Sachs said that while MA reported an EPS beat on lower expenses, with net revenues roughly in line, they expected a muted reaction to the results, as MA saw “a slowdown in ROW volumes and incentives came in higher than expected.”
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“We see the main driver of the slightly weaker trends in MA vs Visa as higher exposure to weaker trends in Asia as well as greater FX exposure,” Goldman said. “So, given the modest outperformance versus V year-to-date and increased exposure to some of the weaker/macro spending pockets around the world, shares may be slightly weaker on the back of results.”
