Mastercard Gains as Vaccines Help Consumers Get Back on the Road

(Bloomberg) -- Mastercard Inc. posted a surprise increase in revenue as consumers returned to travel faster than many analysts predicted.

The fees Mastercard collects from overseas spending on its cards dropped 23% in the first quarter, to $932 million, smaller than the 28% decline Wall Street was expecting.

“We started the year with good momentum, delivering positive net revenue growth this quarter, and are encouraged by the return of domestic spending levels to pre-pandemic trends,” Chief Executive Officer Michael Miebach said Thursday in a statement.

After consumers spent much of last year sheltering in place, Mastercard and Visa Inc. are set to benefit as travel picks up and vaccines for the coronavirus begin to proliferate around the world. Visa on Tuesday said it has seen a pick-up in Americans visiting Mexico and certain countries in the Caribbean that have opened their borders to tourists.

Read more: Visa Sees ‘Beginning of the End’ of Pandemic Spending Woes

Overseas transactions are often the most lucrative for both networks. Mastercard said such volume declined 17% during the first three months of the year, which was also a smaller drop than analysts estimated. There are signs a rebound is coming: Such spending climbed 66% in April from a year earlier, Mastercard said.

That helped fuel a 4% jump in net revenue, to $4.2 billion, topping the $3.99 billion average of analysts’ estimates compiled by Bloomberg.

Mastercard shares climbed 1.8% to $402.80 at 8:02 a.m. in early trading in New York. They had climbed 11% this year through Wednesday, outpacing the 8.6% advance of the S&P 500 Information Technology Index.

Mastercard said overall spending on its cards climbed 10% to $1.3 trillion, helped by a 27% surge in debit volume. Results were boosted by stimulus payments the U.S. government sent directly to consumers’ bank accounts.

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