Mastercard May Report a Profit Pullback on Slowing Purchase Volumes

Persistently high inflation and a banking crisis prompted consumers to spend less toward the end of the quarter

Mastercard logo

Joan Cros Garcia - Corbis / Contributor / Getty Images

Mastercard (MA), one of the world’s leading payment processing companies, will likely report a small pullback in profits as gross dollar volume (GDV) from purchases grew at a slower pace, likely reflecting consumers’ decisions to spend less amid persistent inflation and an economic slowdown.

Key Takeaways

  • Mastercard net income likely fell 1.2% from the year-ago quarter, to $2.6 billion or $2.72 a share.
  • Revenues are forecast at $5.64 billion, up 9.2% year-over-year.
  • Gross dollar volume (GDV) from purchases likely rose 8.7% from a year earlier, decelerating from 16.9% in the same period last year as consumers spent less.

Mastercard will probably say net income fell 1.2% from the same quarter last year, to $2.6 billion, or $2.72 a share, according to Visible Alpha estimates. Total revenue is forecast at $5.64 billion, up 9.2% from the year-ago quarter.

Worldwide gross dollar volume from purchases likely rose 8.7% from a year earlier to $1.65 trillion, slowing sharply from 16.9% growth in the first quarter of last year. Mastercard reports its first-quarter earnings on Thursday, April 27 before markets open.

Mastercard Key Metrics
  Q1 FY 2023 (Projection) Q1 FY 2022 Q1 FY 2021
Gross Dollar Volume (GDV) from Purchases ($B) 1,647  1,516 1,297
Net Income ($M) 2,602 2,632 1,828 
Earnings per Share ($)  2.72 2.68 1.83

Slower spending on credit and debit cards later in the quarter likely led to smaller gains in gross dollar volume. After a strong start to the year, card spending cooled throughout February and March, with the slowdown accelerating amid turmoil in the banking sector.

Card spending per household fell 1.5% in March and was up just 0.1% year-over-year, the slowest annual growth rate since February 2021, Bank of America said in its latest consumer checkpoint report. U.S. retail sales, which are not adjusted for inflation, fell in February and March after surging 2.8% in January.

Despite a pullback in consumer spending, growth in GDV fell less in the United States than most international markets. Purchase GDV growth in the U.S. likely came in at 10.2%, outpacing gains of 7% and 6.3% in Europe and Canada, respectively, but underperformed Latin America, which surged 15.7%. Almost 9.7 billion transactions involving MasterCard credit and debit cards were recorded in the U.S., rising 8% year-over-year and outpacing the previous three quarters’ gains.

Mastercard shares have risen about 6% year-to-date, outperforming the broader S&P 500 Financial Sector, which is down a little less than 5% over the same period.

Mastercard (MA) vs. S&P 500 Financial Sector Return YTD


Article Sources
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  1. Bank of America. "Consumer Checkpoint Report: April 2023."

  2. U.S. Census Bureau. "Advance Monthly Sales for Retail and Food Services, March 2023."

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