MasterCard reported a 15% jump in second-quarter earnings this morning, standing in contrast to the loss Visa reported last week due to expenses both companies incurred in offering a multi-billion dollar antitrust settlement to a merchant class action.
MasterCard, of Purchase, N.Y., reported a $700 million profit for the quarter, which includes $20 million, or $13 million after taxes, it set aside for the settlement. Its share of the settlement is $790 million, and the company set aside that amount for potential litigation costs in its fiscal fourth quarter for 2011.
Visa reported a $1.8 billion loss for its quarter last week for its share of the class-action settlement.
Under the deal, Visa, which controls about two thirds of the cards market, will pay $4.4 billion, while a handful of banks will add another $1 billion. Visa is funding most of its share of the settlement by the converting credit union- and bank-owned Class B shares.
For its fiscal second quarter MasterCard reported a 9% increase in revenue, to $1.8 billion, from a year earlier as worldwide purchases increased on its cards by 13% during the period.
For the first six months of the fiscal year MasterCard reported a 13% increase in revenue, to $3.6 billion, and an 18% increase in net income to $1.4 billion.
MasterCard's U.S. debit card purchase volume rose 13.3% during the quarter to $111 billion from $98 billion a year earlier, while debit transaction volume increased 13.4% to 2.8 billion from 2.47 billion.
The firm's debit card volume got a push from new Federal Reserve debit card routing rules that took effect April 1, requiring issuers to provide merchants with the choice of at least two unaffiliated PIN-debit networks for processing transactions.
"We feel very good about U.S. PIN debit in particular, even though we don't yet know how those volumes will all finally shake out," Ajay Banga, MasterCard's president and CEO, told analysts during a conference call to discuss the results.
Credit card purchase volume during the quarter rose 4.65%, to $135 billion from $129 billion a year earlier; credit card transactions rose 6.6%, to 1.6 billion from 1.5 billion.
Kate Fitzgerald contributed to this article.