Mastercard profit beats expectations on resilient consumer spending

By Arasu Kannagi Basil

(Reuters) -Mastercard beat Wall Street estimates for first-quarter profit on Thursday as customers kept up spending on its card network despite the economic uncertainty sparked by U.S. President Donald Trump’s sweeping tariffs.

Executives said the fundamentals supporting consumer and business spending remained solid despite sentiment taking a hit from tariff-driven turmoil and geopolitical tensions.

"While there is uncertainty in the world, we’ve built a diversified, resilient business model and proven strategy that enables us to effectively navigate various economic environments," CEO Michael Miebach said in a statement.

The results underscore the resilience of card networks, which are viewed as more defensive in a downturn, given their high share of everyday spend and expense flexibility to support profit growth.

Mastercard (NYSE:MA)’s business remains strong and consumer spending has been healthy, executives said, adding that the firm has not seen a significant pull-forward in spending.

Miebach told analysts that Mastercard saw generally stable spending in the United States, while Europe was a bit more challenging.

Mastercard’s results, which cap off the earnings season for card companies, are closely watched by Wall Street to assess the health of U.S. consumers.

CROSS-BORDER TRENDS

While cross-border travel growth remains broadly strong, Mastercard is seeing some moderation in select markets in the Middle East and Africa as they come off recent periods of "extremely high" growth, Chief Financial Officer Sachin Mehra told analysts.

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Its cross-border volumes, which track spending on cards outside the country of their issue, increased 15% for the quarter.

Growing revenue contribution from value-added services such as threat intelligence and fraud reduction has also diversified Mastercard’s business model.

Its value-added services and solutions business, which now makes up more than a third of its revenue, fetched 18% higher revenue in the quarter.

Excluding one-time costs, Mastercard earned $3.73 per share in the first quarter, beating analysts’ expectation of $3.57 per share, according to estimates compiled by LSEG.

Revenue jumped 17% to $7.25 billion. Mastercard shares fell 0.4% in morning trading.

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