Why Mastercard fell more than 8% on Wednesday


What happened

MasterCard (NYSE: MA) didn’t sound particularly masterful in its latest quarterly results. The company released its third quarter of fiscal 2020 figures on Wednesday morning, with headline figures coming in below analysts’ estimates. Investors quickly traded the stock, which fell more than 8% on the day.

So what

Everyone expected Mastercard to show declines in revenue and profitability; there is a raging global pandemic, after all, and economies are tight because of it.

The company’s revenue fell 14% year-over-year to $ 3.84 billion, some distance from analysts’ average projection of 3.94 billion of dollars. Non-GAAP (adjusted) net income fell more sharply, falling 27% to $ 1.6 billion, or $ 1.60 per share. Tipsters collectively modeled $ 1.64 for the latter.

Image source: Getty Images.

The economic hardships of the pandemic were the obvious culprit, while several articles were of particular concern. One was Mastercard’s generally robust take on cross-border transactions; these have fallen by 36% per year.

During this time, the company suffered compared to its rival Visa (NYSE: V), which posted more encouraging results in the third quarter after the market closed the same day.

Now what

Not all of the Mastercard news was bad. With an adjusted net profit margin of over 42%, the financial sector giant remains far in the dark. He is also evolving in a world that continues to move away from cash towards the card and digital means of payment, a trend that strongly favors card giants like him and Visa.


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