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Mastercard (MA)Stock (Credit Services Industry, Financial Services Industry, Services Industry)
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Antitrust Settlement and Rising expencesMasterCard, the world’s second-biggest credit-card company, posted a $746.7 million loss on costs to settle an antitrust lawsuit. American Express (AXP) sued MasterCard, along with Visa (V), in November 2004 after the U.S. Supreme Court ruled the companies violated antitrust laws by preventing banks from offering rivals’ cards. MasterCard said back on June 25 would pay as much as $1.8 billion to settle the complaint. Consequently, the company showed a net loss of $5.74 per share in the second quarter compared with earnings of $252.3 million, or $1.85, a year earlier. Excluding the expense, profit was $276 million, or $2.11 per share, beating the $2.02 average estimate of 19 analysts. Quarterly revenues grew 25% to $1.2 billion while total operating expenses excluding special items, increased 14.6% to $830 million. General and administrative expenses increased as well, rising 15.7% on higher compensation for new personnel and bigger severance costs. |
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