Mastercard (MA) revenue jumps 30%, STMicro (STM) profits nearly double

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Mastercard (MA) revenue jumps 30%, STMicro (STM) profits nearly double

 Mastercard (MA) revenue jumps 30%, STMicro (STM) profits nearly double
Image source: whiteMocca, Shutterstock

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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Earnings update: Mastercard Incorporated (NYSE: MA) and STMicroelectronics N.V. (NYSE: STM).

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.

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