MasterCard: Estimates 20% Growth In Net Income For 2010

MasterCard Inc. (MA) said Wednesday it expects profit to grow by at least 20% this year.

This forecast puts MasterCard's estimated net income for 2010 at around $1.75 billion, compared to the $1.46 billion profit it earned in 2009.

Setting long-term targets, the company said it estimates earnings per share to rise at a compound annual rate of 20% and net revenue growth of 12%-14% for 2011 through 2013.

These forecasts, announced during MasterCard's annual investment community meeting, come on the heels of a program unveiled a day earlier to buy back up to $1 billion of the company's class A common shares.

The Purchase, N.Y.-based company said last month it plans to purchase European payment processor DataCash Group PLC (DATA.LN) for $520 million, a deal aimed at expanding MasterCard's electronic-commerce business. MasterCard has said the transaction will trim five cents from its fourth-quarter per-share earnings. The deal is expected to close by the end of October.

MasterCard and rival Visa Inc. (V) are insulated from credit delinquencies and defaults because they don't lend to consumers. Visa and MasterCard profit from the fees they charge banks, including J.P. Morgan Chase Co. (JPM) and Citigroup Inc. (C), to process card payments on the plastic the banks issue. These financial institutions are among the top issuers of MasterCard- and Visa-branded cards.

MasterCard and Visa scored a victory in the sweeping financial reform signed into law last month because the new rules left untouched the so-called network fees they charge banks on debit cards. MasterCard said Wednesday the legislation, which curbs debit-card transaction fees, will not have a material impact on business.

MasterCard shares recently traded at $210.47, up 5.36% on the day.

-By Aparajita Saha-Bubna, Dow Jones Newswires; 617-654-6729; aparajita.saha-bubna@dowjones.com

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