April 29 (Bloomberg) -- MasterCard Inc., the world's second-biggest credit-card network, said profit more than doubled, earning more than rival Visa Inc. as international revenue rose. The shares surged the most in six months of New York trading.

First-quarter net income increased to $446.9 million, or $3.38 a share, from $214.9 million, or $1.57, a year earlier, the Purchase, New York-based company said today in a statement. Excluding gains from special items, profit was $2.59 a share, exceeding the $2 average estimate of 20 analysts surveyed by Bloomberg.

MasterCard has beaten analysts' profit estimates every quarter since Chief Executive Officer Robert Selander took the company public in May 2006. The network, which generates half its revenue from overseas, is less reliant on the U.S. than Visa, which gets about two-thirds from domestic transactions. MasterCard increased prices on cross-border fees in the quarter, driving a 29 percent gain in overall revenue.

``MasterCard has clearly been at the forefront of pricing increases,'' Sanjay Sakhrani, an analyst at KBW Inc. in New York, said in an interview. ``Visa's been hesitant to outright take pricing higher, and it definitely helps MasterCard to have more of an international presence.'' He rates both companies ``buy.''

Net income included a $49 million gain from ending a business contract and $56 million from the sale of a stake in Brazilian credit-card company Redecard SA.

High Margin

MasterCard rose $31.48, or 13 percent, to $273.98 in New York Stock Exchange composite trading at 4:15 p.m., the biggest one-day gain since October 31, 2007. The company has more than doubled in the past year. Visa, which reported quarterly profit yesterday for the first time since going public, climbed $5.25, or 6.9 percent, to $80.88.

Selander is under pressure to keep profits rising while the U.S. economy slows and Visa, bolstered by a record $19 billion initial public offering last month, tries to increase its own market share as consumers abandon cash and checks for cards.

He cautioned investors by saying the company's 44 percent first-quarter operating margin was unusually high because of surging revenue.

``I don't look at this quarter's margin as the type of margin we should plan for,'' Selander said in a Bloomberg Television interview. ``If we saw more slowdowns like we're seeing in the U.S. economy in other parts of the world, we wouldn't have seen the same measure of operating margin improvement.''

Unified Structure

Selander also said that MasterCard has the advantage of including all of Europe in the company's operations. Visa's Western European division wasn't included in the IPO and is still owned by local banks.

MasterCard's revenue rose 29 percent to $1.2 billion from a year earlier, while operating expenses climbed 11 percent to $666 million. Purchases made using cards rose 15 percent to $453 billion. A weaker dollar compared with currencies including the euro and Brazilian real contributed to 5.1 percentage points of the revenue increase.

``The primary drivers of MasterCard's business, including retail sales, travel volumes and credit growth still appear to be largely intact,'' Adam Frisch, analyst at UBS AG in New York, said in an April 10 research note. He rates the company ``buy.''

In addition to collecting payments from merchants on transactions that move through its network, MasterCard gets fees for handling currency conversions. Cross-border transactions rose 24 percent by volume, the company said.

International Markets

The value of transactions made by cardholders grew 8.9 percent in the U.S., compared with 30 percent in Europe, 28 percent in Asia, 29 percent in Latin America and 34 percent in South Asia, the Middle East and Africa. MasterCard had 935 million cards in service at the end of March, a 12 percent rise from a year earlier.

Visa has advanced 84 percent since its IPO. The company reported quarterly profit increased 28 percent to $314 million yesterday.

MasterCard and Visa sidestep the rising customer defaults of American Express Co. and Discover Financial Services because they only process purchases and don't lend to consumers. Credit- card defaults rose 21 percent last year, according to Moody's Investors Service.

Discover, based in Riverwoods, Illinois, has dropped 35 percent in New York trading in the past year and New York-based American Express has slumped 23 percent. American Express and Discover extend credit to borrowers and also run transaction networks for other lenders.

Card Transactions

Visa's public offering raised $17.9 billion on March 18, the most for a U.S. company, and the tally passed $19 billion after more shares were sold to satisfy demand.

The San Francisco-based company processed 60 percent of the $5.2 trillion spent on general purpose payment cards around the world in 2006, more than the 32 percent controlled by MasterCard, according to Cowen and Co. analyst Moshe Katri.

Consumer buying with credit, debit and charge cards will reach 55 percent of all U.S. transactions by 2011 from 40 percent in 2005, 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: April 29, 2008 16:37 EDT