Mastercard ditches 2020 outlook on plunging customer travel
Mastercard Inc. ditched its full-year outlook for revenue growth and lowered forecasts for first-quarter results it announced just a month ago.
First-quarter net revenue will probably climb by a percentage in the “low single digits,” the Purchase, New York-based firm said Tuesday in a statement. Operating expenses could increase by a percentage in the “low-to-mid-single digits” range.
“We are taking several actions to manage our expenses prudently, including evaluating our travel and entertainment, advertising and marketing, and professional-fees spending starting this quarter,” Mastercard said in the statement.
Mastercard and Visa Inc. have been hit particularly hard by global bans on travel because cardholders’ overseas transactions are among the most profitable on the firms’ networks. Analysts at Wedbush on Monday said a third of the networks’ earnings could be at risk if businesses are shut for a full year.
With its latest guidance, Mastercard is abandoning a forecast it gave on Feb. 24, when it said adjusted revenue would likely grow by 9% to 10% in the first quarter. The firm also said on Tuesday it was suspending its outlook for full-year revenue and expense growth.
Mastercard has asked many employees to work from home, and the firm created a special paid-leave program for employees affected by the virus. It’s also supporting efforts to develop a treatment for the coronavirus, which has sickened almost 400,000 people and killed more than 16,000 globally.