(Reuters) - Mastercard Inc surpassed market estimates for quarterly profit as travel and dining demand held up against a turbulent economy, countering a blow from higher expenses and sending the card firm's shares up 1% premarket on Thursday.
While rising interest rates and stubborn inflation have impaired budgets of lower-income households, wealthier consumers continue to spend on travel and entertainment, boosting transaction volumes at payments processors.
Gross dollar volumes, a metric that represents the total dollar value of all transactions processed by Mastercard, rose 15% on a local currency basis to $2.1 trillion.
Pent-up demand from consumers tired of lockdowns also helped, driving a 35% surge in Mastercard's cross-border volumes - a gauge of travel demand that tracks spending on cards beyond the country of its issue.
The results cap a mixed quarter for the biggest U.S. card firms, which have seen the sector's outlook darkened by worries of a looming recession and decades-high inflation in recent months.
Earlier this week, Visa beat profit estimates and bet on sustained growth at its payments business. However, American Express (AXP.N) missed Wall Street estimates last week, as it kept aside $1.1 billion to cover potential defaults and spent more on promotions.
Mastercard's total operating expenses on an adjusted basis rose 10% to $2.4 billion in the first quarter ended March 31.
Net revenue rose 11% to $5.7 billion, topping expectations of $5.64 billion.
On an adjusted basis, Mastercard earned $2.80 in the quarter, sailing past Wall Street estimates of $2.72 per share, according to Refinitiv IBES data.
The U.S. card firm's net income fell to $2.4 billion, or $2.47 per share, compared with $2.6 billion, or $2.68 per share, a year earlier.
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