(Reuters) – Mastercard Inc <MA.N> reported better-than-expected first-quarter earnings and the payment processor said it has started seeing early signs of spending levels stabilizing, even as the novel coronavirus outbreak wreaked havoc on consumer spending.
Shares of the world’s second-largest payment processor were up 5.27% at $278.80 before the bell.
Net income fell to $1.7 billion, or $1.68 per share, in the first quarter from $1.9 billion, or $1.80 per share, a year earlier, hurt by a rise in losses on equity investments and other costs.
On an adjusted basis it earned $1.83 per share, beating analysts’ estimates of $1.73 per share according to Refinitiv IBES.
The novel coronavirus pandemic has shutdown large parts of the global retail industry as stores remain shut and shoppers stay at home to avoid catching the highly contagious illness.
The outbreak has also hammered the global economy, pushing companies to layoff employees by the millions. That, in turn, could weigh on credit card issuers as more people default on their payments.
Mastercard also said it would temporarily suspend its 2020 share repurchase.
Rival credit card issuer American Express Co <AXP.N> said last week it would cut spending by nearly $3 billion in 2020 after its quarterly profit sank 76% as it set aside more money to brace itself against a wave of potential delinquencies.
Mastercard’s quarterly revenue rose to $4 billion from $3.9 billion a year earlier.
Gross dollar volume, the dollar value of transactions processed, rose to $1.6 trillion on a local currency basis, while cross-border volumes fell 1%.
(Reporting by Noor Zainab Hussain in Bengaluru and Sinéad Carew in New York; Editing by Supriya Kurane)