Mastercard Inc (MA) has reported a 12.72 percent rise in profit for the quarter ended Mar. 31, 2017. The company has earned $1,081 million, or $1 a share in the quarter, compared with $959 million, or $0.86 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $1,100 million, or $1.01 a share compared with $1,000 million or $0.86 a share, a year ago. Revenue during the quarter grew 11.77 percent to $2,734 million from $2,446 million in the previous year period. Total expenses were 44.92 percent of quarterly revenues, up from 44.89 percent for the same period last year. That has resulted in a contraction of 3 basis points in operating margin to 55.08 percent.
Operating income for the quarter was $1,506 million, compared with $1,348 million in the previous year period.
“We’re off to a very good start, with strong revenue and earnings growth driven by solid transaction and volume levels this quarter,” said Ajay Banga, Mastercard president and chief executive officer. “We continue to execute well against our strategy, and by completing the VocaLink acquisition, we can now offer an even greater set of payment options to our customers. This deal redefines our opportunities and positions us favorably to capture new payment flows.”
Operating cash flow drops significantly
Mastercard Inc has generated cash of $745 million from operating activities during the quarter, down 29.58 percent or $ 313 million, when compared with the last year period. The company has spent $246 million cash to meet investing activities during the quarter as against cash outgo of $385 million in the last year period.
The company has spent $1,237 million cash to carry out financing activities during the quarter as against cash outgo of $1,595 million in the last year period.
Cash and cash equivalents stood at $6,006 million as on Mar. 31, 2017, up 22.72 percent or $1,112 million from $4,894 million on Mar. 31, 2016.
Working capital increases sharply
Mastercard Inc has recorded an increase in the working capital over the last year. It stood at $5,790 million as at Mar. 31, 2017, up 38.98 percent or $1,624 million from $4,166 million on Mar. 31, 2016. Current ratio was at 1.82 as on Mar. 31, 2017, up from 1.65 on Mar. 31, 2016.
Days sales outstanding went up to 43 days for the quarter compared with 42 days for the same period last year.
Debt increases substantially
Mastercard Inc has witnessed an increase in total debt over the last one year. It stood at $5,216 million as on Mar. 31, 2017, up 56.50 percent or $1,883 million from $3,333 million on Mar. 31, 2016. Mastercard has witnessed an increase in long-term debt over the last one year. It stood at $5,216 million as on Mar. 31, 2017, up 56.50 percent or $1,883 million from $3,333 million on Mar. 31, 2016. Total debt was 28.09 percent of total assets as on Mar. 31, 2017, compared with 20.96 percent on Mar. 31, 2016. Debt to equity ratio was at 0.93 as on Mar. 31, 2017, up from 0.60 as on Mar. 31, 2016. Interest coverage ratio deteriorated to 38.62 for the quarter from 67.40 for the same period last year.
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