Nov. 3 (Bloomberg) -- MasterCard Inc., the world's second- biggest credit-card company, rose 6.7 percent in late New York trading after beating analysts' estimates on overseas revenue gains.

Profit excluding a previously disclosed $515.5 million charge to settle a lawsuit with Discover Financial Services was $322 million, or $2.47 a share, beating the $2.24 average estimate of 21 analysts surveyed by Bloomberg, the Purchase, New York-based firm said today in a statement.

The Discover settlement frees MasterCard to focus on expanding credit and debit-card revenue, a task made harder by the economic slowdown. The company cut its revenue forecast today and said hiring had been frozen to control expenses. MasterCard lost more than half its market value since reaching $320 a share in June on concern the U.S. slump is spreading to overseas markets, which contribute about half of revenue.

``At a time of unprecedented economic challenges, consumers, businesses, and governments around the world have continued to migrate toward'' credit and debit, Chief Executive Officer Robert Selander said today in the statement.

Including the legal charge, the company reported a net loss of $193.6 million, or $1.49 a share, compared with profit of $314.5 million, or $2.31 a share, a year earlier, the company said. Revenue rose 24 percent to $1.3 billion, with the fastest growth in Latin America, Asia and Europe.

MasterCard rose $9.61 to $153.50 at 5 p.m. in New York in trading after the close of regular U.S. markets.

Second Loss

The quarterly loss is the second in a row for MasterCard, which posted a $746.7 million shortfall in the period ending June 30 after booking a $1 billion charge on settling similar antitrust accusations from American Express Co. Discover and American Express sued MasterCard and Visa Inc. in 2004 after the U.S. Supreme Court ruled the networks violated antitrust laws.

MasterCard said Oct. 27 it took a $515.5 million third- quarter charge for paying its part, along with bigger rival Visa Inc., of Discover's $2.75 billion settlement. Riverwoods, Illinois-based Discover accused the networks of hurting its business by blocking banks from issuing Discover-branded cards.

The U.S. economy suffered its biggest decline since 2001 in the third quarter, with gross domestic product contracting at a 0.3 percent annual pace, the Commerce Department said last week. More than 700,000 Americans have lost their jobs this year.

Card Use

Overall credit and debit-card spending advanced in the recessions of 1991 and 2001 and will rise next year because plastic is steadily replacing cash and checks, Tien-tsin Huang, analyst at JPMorgan Chase & Co., said in an April research note.

Like Visa, which said last week that its adjusted net income doubled to $488 million, MasterCard sidesteps the rising customer defaults of American Express and Capital One Financial Corp. because it collects fees to shuttle payments between financial institutions, letting banks take the risk of making loans to consumers.

American Express said third-quarter profit from continuing operations dropped 23 percent to $861 million. It also announced plans to cut staff. Discover almost doubled provisions for loan losses and warned that it could set aside more this year. The lender said income from continuing operations slumped 27 percent to $178.9 million.

Capital One, the Mclean, Virginia-based credit-card lender and bank, had to add $208.6 million to loss reserves and said it expects about $7.2 billion in soured loans in the next year.

MasterCard had 36 percent of the U.S. credit and debit-card market last year, compared with San Francisco-based Visa's 51 percent and 12 percent for New York-based American Express, according to the Nilson Report, an industry newsletter based in Carpinteria, California.

To contact the reporter on this story: Hugh Son in New York at hson1@bloomberg.net

Last Updated: November 3, 2008 17:33 EST