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Highlights
- Mastercard Incorporated (NYSE:MA) revenue soared 30% to US$5.0 billion in Q3.
- STMicroelectronics N.V. (NYSE:STM) net income nearly doubled to US$474 million.
- Both are dividend-paying companies and have a presence globally.
Mastercard Incorporated (NYSE:MA) and STMicroelectronics N.V. posted strong third-quarter financial results before the opening bell on Thursday.
The MA stock traded at 2.76% higher to US$344.9999, and the STM was priced at US$47.2596, up 4.95%, in the premarket session.
Third-Quarter Snapshot
Mastercard posted net revenue of US$5.0 billion, up 30%, compared to US$3.8 billion a year ago. It posted gross dollar volume growth of 20% and cross-border volume growth of 25% on a local currency basis, with a switched transactions growth of 24% in the quarter.
The company’s net income was US$2.4 billion, up 59% YoY, compared to US$1.5 billion in the September quarter of 2020. Its EPS diluted was US$2.44 compared to US$1.51 in Q3, 2020. The adjusted net income was US$2.3 billion, and adjusted diluted EPS was US$2.37 in the quarter.
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Mastercard issued 2.9 billion Mastercard and Maestro cards to customers as of September 30, 2021. In addition, it repurchased around 4.3 million shares for US$1.6 billion and paid US$434 million in dividends.
The New York-based company has its presence in over 210 countries and processes transactions in more than 150 currencies. Its current market cap is US$331 billion, the P/E ratio is 46.63, and its dividend yield is 0.49%.
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Source – Pixabay
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STMicroelectronics N.V.
Its revenue grew by 6.9% to US$3.20 billion from US$2.7 billion in Q3, 2020. The increase was due to strong demand globally and customer programs in personal electronics.
Its Automotive & Discrete Group (ADG) segment revenue was US$1.0 billion, Analog, MEMS & Sensors Group (AMS) segment revenue was US$1.3 billion, Microcontrollers & Digital ICs Group (MDG) generated US$920 million, and the balance of US$5 million came from other sources.
The gross margin was 41.6% in Q3, 2021, and the operating margin was 18.9%.
Its net income nearly doubled to US$474 million, up 96% increase YoY, compared to US$242 million in Q3 previous year.
The EPS diluted was US$0.51 versus EPS diluted of US$0.26 in the same quarter a year ago.
The net cash from operating activities was US$895 million, and non-GAAP free cash flow was US$420 million at the end of the third quarter.
STMicroelectronics paid cash dividends of US$55 million and spent US$87 million under the share repurchase program. STMicro's net financial position was US$798 million on October 2, 2021, compared to US$662 for the comparable quarter of September 26, 2020.
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Outlook
The company expects revenue of US$3.40 billion, up 6.3%, and a gross margin of 43% in the fourth quarter. The fiscal full-year revenue to be about US$12.6 billion, at a 23.3% YoY growth.
STMicroelectronics is a semiconductor technology company based in Geneva, Switzerland. It has a market cap of US$40 billion. Its P/E ratio is 26.18, and the dividend yield is 0.46%.
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Bottomline
Mastercard’s strong quarterly results were driven by solid domestic spending and cross-border spending growth, reaching their pre-pandemic levels. In addition, STMicro’s profits soared as demand for semiconductors jumped exponentially. Both the companies are listed on NYSE. The NYSE composite index gained 17.21% year-to-date. By contrast, Mastercard stock fell 4.4% YTD, and STMicroelectronics stock rose 28.74% during the same time. However, investors must apply due diligence before investing in stocks.
