(Bloomberg) -- Mastercard Inc. shares rose the most since January after profit beat analysts’ estimates on strength in customer spending and online payments.
Global purchase volume in the three months through June jumped more than 7% from a year earlier, to $1.97 trillion, also higher than analysts expected.
Higher revenue and profit in the quarter were supported by “continued healthy consumer spending” and robust cross-border volume growth, Chief Executive Officer Michael Miebach said in a statement Wednesday. The results show how Mastercard has been able to realize gains from consumers’ shift to digital purchases, he said.
Shares of the company rose 3.2% to $461.70 at 12:01 p.m. in New York, the biggest intraday jump since January.
Mastercard’s results contrast with those released last week by Visa Inc., which slightly missed revenue estimates, a rare occurrence that pushed its stock lower after the report.
Mastercard reported $3.3 billion in adjusted net income, or $3.59 per share, topping estimates of $3.52. The company’s global card count increased 7.2% from last year, to 3.42 billion.
As consumers spend more and inflation persists, they have also been carrying more debt on their credit cards. Citigroup Inc., for one, has responded by decreasing credit lines and proactively shutting down unused accounts. Capital One Financial Corp. has stockpiled more funds to cover card losses.
Chief Financial Officer Sachin Mehra said that purchasing power is being fueled by healthy employment levels and wage growth that’s still outpacing inflation. The varied nature of Mastercard’s businesses — catering to both affluent consumers spending on travel and experiences as well as less well-off consumers — means the firm is still able to benefit if appetites move away from credit, he said.
“In times of hardship, people tend to spend more on debit,” Mehra said in an interview. “Diversification does provide you a little bit of a hedge on that.”
During the quarter, a federal judge rejected a $30 billion deal brokered by Mastercard and Visa with US merchants, shutting down an attempt to settle longstanding litigation over credit-card swipe fees. Judge Margo Brodie of the US District Court for the Eastern District of New York said a trial in the matter should take place in New York, where the cases were originally filed.
“We’re disappointed where this has landed for now, and I would describe it as: We respectfully disagree with the ruling,” Miebach said Wednesday on a conference call with analysts. He said it would have “produced a lot of benefit” for merchants, consumers and all parties involved, but the firm is ready for next steps in the litigation.
(Updates shares in first and fourth paragraphs, adds CFO comment in eighth paragraph.)
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