This Sept. 21, 2011 photo, shows a MasterCard sign posted on a revolving door, in New York. MasterCard Inc. said Wednesday, Nov. 2, 2011, its third-quarter profit soared 38 percent on a big spike in card use, new deals with certain banks to issue debit cards bearing its logo and new transaction processing deals overseas. (AP Photo/Mark Lennihan)
This Sept. 21, 2011 photo, shows a MasterCard sign posted on a revolving door, in New York. MasterCard Inc. said Wednesday, Nov. 2, 2011, its third-quarter profit soared 38 percent on a big spike in card use, new deals with certain banks to issue debit cards bearing its logo and new transaction processing deals overseas. (AP Photo/Mark Lennihan)
NEW YORK (AP) ? MasterCard Inc. said Wednesday its third-quarter profit soared 38 percent on a big spike in card use around the world.
The Purchase, New York-based payments processor also attributed the strong results to new deals with certain banks to issue debit cards bearing its logo and new transaction processing deals overseas.
MasterCard reported net income of $717 million, or $5.63 per share for the three months ended Sept. 30. That compared with $518 million, or $3.94 per share, for the year-earlier period.
Revenue jumped 27 percent to $1.82 billion, from $1.43 billion last year.
The results far exceed expectations and outpaced the performance of its larger rival, Visa Inc., which missed revenue forecasts last week.
Analysts, on average, had forecast profit for MasterCard of $4.81 per share, on revenue of $1.7 billion, according to data provided by FactSet.
Purchase volume, the amount spent on debit and credit cards, rose 17 percent worldwide to $628 billion.
In the U.S., spending was up 13 percent to $227 billion. Visa and American Express Co. said most of the increased spending in the U.S. they saw last quarter came from affluent card users, a cause for some concern as it reflects broader weakness for the economy.
MasterCard has far fewer debit cards in use than Visa, but its revenue from those cards is growing faster. Mastercard said U.S. purchases with its debit cards rose 23 percent to $97 billion. Its rival's growth in debit purchase volume was just 8 percent last quarter, a point noted by Wall Street.
In addition, MasterCard announced this week that it signed Huntington Bank to a new debit conversion deal, following on the heels of other recent wins including SunTrust Banks. CEO Ajay Banga credited such deals as one of the reasons for the strong quarterly results.
Still, more than half of MasterCard's revenue comes from outside the U.S., and card use rose nearly 20 percent abroad. Big increases in purchases in Latin America and the Asia-Pacific-Middle East region led overseas gains. The company's worldwide footprint has helped to partially insulate it from economic woes in the U.S. and Europe. Banga credited new processing deals in Brazil and the Netherlands with helping to boost profit for the quarter.
MasterCard said it increased rebates and incentives, a common practice in the industry aimed at winning business. The topic is one that concerns analysts, because it could weaken results in the future.
In premarket trading, MasterCard shares shot up $27.50, or 8.2 percent, to $361.80. The stock closed at $334.30 Tuesday, up 49 percent for the year.
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