MasterCard tops third-quarter forecasts
Payment-processing company MasterCard Inc. said on Thursday that its adjusted third-quarter profit rose slightly from a year earlier, as the company saw solid growth in activity worldwide on its payment network.
MasterCard said it had net income of $1.03 billion, excluding a one-time $50 million charge tied to the termination of the company’s pension plan. That was up from $1.02 billion in the same period a year earlier. Pershare earnings, excluding that one-time charge, were 91 cents per share, up from 87 cents a share a year earlier.
The results beat Wall Street expectations: Analysts surveyed by Zacks Investment Research were looking for earnings of 88 cents per share.
Payment volume on MasterCard’s network, a key measure of the company’s business, was up 12.3 percent to $852 billion in the quarter on a localcurrency basis. U.S. payment volume was $311 billion, up 8 percent from a year earlier.
Total revenue in the quarter was $2.53 billion, up from $2.49 billion a year earlier. Revenue missed Wall Street forecasts, however. Fourteen analysts surveyed by Zacks had expected $2.54 billion.
Aetna
Health insurer Aetna Inc. raised its forecast for full-year operating earnings for the fourth time this year on strong performance in its government business. The company also said that underlying operating earnings will increase in 2016.
Aetna said it expects 2016 operating earnings per share to rise by a low double-digit percentage from a baseline of $7 on membership growth in its Medicare and Medicaid plans. The baseline does not presume any prior year’s reserve development, the company said.
Insurers have been benefiting from the expansion of Medicaid, a federal health-insurance program for lower-income people that is administered by the states.
J.P. Morgan analyst Gary P. Taylor noted that Aetna struck a more bullish tone than rival Anthem Inc, which reported results on Wednesday.
Aetna said on Thursday that it is not making money this year from its individual business that sells government-subsidized plans on exchanges created under the Affordable Care Act, but it said profitability could improve in the business next year.
“We think it’s way too early to call it quits on the ACA and on the exchanges … we view it still as a big opportunity,” Aetna Chief Executive Mark Bertolini said on a conference call with analysts.
Aetna said it added 815,000 members through the Obamacare exchanges and 280,000 off it in the third quarter.
UnitedHealth Group Inc. and Anthem had said their Obamacare insurance businesses was being hampered by lower-thananticipated enrollment.
Aetna, which is in the process of buying rival Humana Inc., raised its 2015 operating earnings to $7.45 to $7.55 per share from its previous estimate of at least $7.40.
Net earnings fell 5 percent to $560.1 million, or $1.59 per share, in the third quarter.
On an adjusted basis, the company earned $1.90 per share, above the average analyst estimate of $1.77 per share, according to Thomson Reuters I/B/ E/S.
Spending on medical claims as a percentage of premiums improved to 81.1 percent from 82.3 percent a year earlier.
Total revenue rose to $14.95 billion from $14.73 billion, helped by higher premium yields.
LinkedIn Corp’s quarterly revenue and profit handily beat analysts’ estimates as the operator of the world’s biggest professional networking website earned more from its recruitment-services business and from advertisements and paid memberships.
The company also raised its full-year profit and revenue forecasts.
LinkedIn has been spending heavily on expansion by buying companies, hiring sales personnel and increasing its presence in China and other foreign markets.
Expanded offerings drove a 46 percent increase in revenue in the company’s Talents Solutions business, which connects recruiters and job seekers. The business accounted for nearly twothirds of LinkedIn’s total revenue.
Revenue from ads on its website rose 28 percent, while paid membership income increased 21 percent.
LinkedIn, which operates in more than 200 countries and territories, said the total number of members rose 20 percent to 396 million.
Starbucks
Starbucks Corp. delivered another quarter of sales gains as more customers visited its stores worldwide. However, the coffee giant issued a modest profit forecast for the current quarter.
The Seattle-based company said it expects to earn 44 to 45 cents per share in its first quarter, just shy of the 47 cents per share analysts expect.
Starbucks otherwise reported an impressive fiscal fourth quarter: It earned $652.5 million, or 43 cents a share, meeting analyst forecasts, according to FactSet.
Revenue jumped 18 percent to $4.91 billion, just ahead of forecasts.
The gains were made on increased traffic and spending in its stores as more people indulged on food and higher-priced drinks.
Starbucks said that revenue in its stores open at least a year — considered a key indicator of financial performance — jumped 8 percent in the fourth quarter.
The profit gains came despite increased spending on digital efforts such as its mobile order and pay service and additional spending on employees, including wage increases and education reimbursement.
Starbucks earned $2.76 billion in its full fiscal year on revenue of $19.16 billion.
In its new fiscal year, Starbucks expects to earn between $1.87 and $1.89 per share, in line with market forecasts of $1.88 per share.
The company, which has more than 23,000 stores worldwide, plans to add 1,800 stores in its 2016 fiscal year.