MasterCard Falls After Forecasting Slower Long-Term EPS Growth

MasterCard Inc., the second-largest U.S. payments network, was among the worst performers in the S&P 500 Information Technology Index after forecasting slower growth in earnings per share over the next three years.

MasterCard fell 0.8 percent to $92.16 at 12:47 p.m. in New York as the 69-company index rose 0.5 percent. The shares gained 7.8 percent this year through Tuesday, compared with the 4.4 percent decline of the Standard & Poor’s 500 Index.

EPS growth is expected to be “in the mid-teens” between 2016 and 2018, compared with current guidance of at least 20 percent between 2013 and 2015, the Purchase, New York-based company said Wednesday in a regulatory filing. Revenue growth is expected to increase at a “low double digits” pace, the company said, compared with 11 percent to 14 percent in the earlier period.

MasterCard maintained an annual operating margin target of a minimum of 50 percent, according to the filing.

A slightly higher tax rate and continued company stock repurchases at higher prices will contribute to the slower growth in earnings per share, Chief Financial Officer Martina Hund-Mejean said in an investor-day presentation in New York.

MasterCard will continue to expand in countries outside the U.S. including China through acquisitions, she said. A strengthening U.S. dollar will probably continue to hurt MasterCard’s business over the next few years, Hund-Mejean said.

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