Credit card and global payments processor MasterCard said Friday its first-quarter profit fell 18% from the year-ago period that included a special gain on the sale of an investment. The earnings still edged out analysts' expectations.
New income for the quarter ended March 31 fell to $367.3 million, or $2.80 per share. Purchase, N.Y.-based MasterCard earned $446.9 million, or $3.37 per share, during the same quarter last year.
Last year's results included a $173 million gain from the sale of a portion of MasterCard's investment in Redecard SA, a Brazilian credit and debit card provider.
Net revenue fell 2% to $1.16 billion from $1.18 billion a year ago. The dip was primarily due to foreign currency translation. On a constant currency basis, MasterCard's revenue increased 2% from the year-ago period.
Analysts polled by Thomson Reuters, on average, forecast earnings of $2.61 per share for the quarter on revenue of $1.21 billion.
Despite a weakening global economy, MasterCard still saw growth in the number of processed transactions — up 6% to 5.1 billion.
The dollar value of those transactions fell 10%, however, primarily due to foreign currency exchange. On a local currency basis, purchase volume increased less than 1%.
MasterCard is also cutting costs, like many other companies around the world, as the economy weakens. The company reduced costs in the first quarter, which helped improve its operating margin. The company's operating margin improved 5 percentage points to 48.6% during the first quarter.
Total operating expenses fell 11% to $595 million. Costs were trimmed through initiatives to reduce travel expenses, professional fees and personnel costs. MasterCard, however spent $19 million on severance costs during the quarter.
MasterCard also slashed advertising and marketing spending by more than 35% to rein in expenses during the quarter.