MasterCard Incorporated reports third-quarter results

Net revenue for the third quarter of 2013 was 2.2 billion USD, a 16 per cent increase versus the same period in 2012. Adjusted for currency, net revenue increased 15 per cent. The company indicated that net revenue growth was driven by the impact of a 15 per cent increase in gross dollar volume, on a local currency basis, to over one trillion USD; an increase in processed transactions of 16 per cent, to 10 billion, and an increase in cross-border volumes of 19 per cent
These factors were partially offset by an increase in rebates and incentives.
Worldwide purchase volume during the quarter grew 14 per cent on a local currency basis versus the third quarter of 2012, to 763 billion USD. As of September 30, 2013, the company’s customers had issued almost two billion MasterCard and Maestro-branded cards.
“We had another good quarter with growth across all geographies,” said Ajay Banga, MasterCard president and CEO. “A key component of our strategy involves using our technology and expertise to provide secure acceptance solutions that make it simpler and more convenient for people to pay and be paid. In the quarter, we partnered with technology companies and merchants to develop standards and solutions that ensure safer and more secure transactions and we launched services like Simplify Commerce, our developer-friendly solution which allows merchants to begin accepting mobile and e-Commerce payments, regardless of brand, in a matter of minutes.”
Total operating expenses increased 14 per cent, to 970 million USD, during the third quarter of 2013 compared to the same period in 2012. Adjusted for currency, operating expenses increased 13 per cent. The increase was primarily driven by higher investments in people and marketing to support strategic initiatives.
Operating income for the third quarter of 2013 increased 17 per cent over the year-ago period and the company delivered an operating margin of 56.3 per cent.
MasterCard reported other income of six million USD in the third quarter of 2013 versus other income of two million USD in the third quarter of 2012. The increase was primarily driven by an adjustment to interest expense related to the reversal of tax reserves.
MasterCard’s effective tax rate was 29.9 per cent in the third quarter of 2013, versus a rate of 27.6 per cent in the comparable period in 2012. The increase in the effective tax rate for the period was primarily due to higher tax benefits recognized in the third quarter of 2012.
During the third quarter of 2013, MasterCard repurchased approximately 575,000 shares of Class A common stock at a cost of approximately 345 million USD, with 912 million USD remaining under the current repurchase program authorization.
For the nine months ended September 30, 2013, MasterCard reported net income of 2.5 billion USD, up 15 per cent versus the year-ago period and excluding a special item representing a charge related to the U.S. merchant litigations taken in the second quarter of 2012. Including the special item, net income was up 16 per cent versus the year-ago period. Earnings per diluted share was 20.46 USd, up 19 per cent excluding the special item and up 20 per cent including the special item from the second quarter of 2012. These net income and earnings per share growth figures are reconciled to their comparable GAAP measures in the accompanying financial tables.
Net revenue for the nine months ended September 30, 2013 was  6.2 billion USD, an increase of 13 per cent versus the same period in 2012, both as reported and adjusted for currency.