Mastercard Drops After Warning of Impact of Coronavirus

Shares of Mastercard were falling into the red on Monday after the company revealed that the coronavirus may affect 2020 revenue.

“Cross-border travel, and to a lesser extent cross-border e-commerce growth, is being impacted by the Coronavirus,” the company said in a statement on Monday.

Mastercard said its first-quarter revenue growth will be about two to three percentage points lower than previous guidance.

“If the impact is limited to the first quarter only, we expect that our 2020 annual year-over-year net revenue growth rate would be at the low end of the low-teens range,” the company added.

Shares of Mastercard fell nearly 3% in after-hours trading on the announcement.

It was last month that Mastercard reported fourth quarter earnings per share of $1.96 on revenue of $4.41B. Analysts polled by Investing.com anticipated EPS of $1.87 on revenue of $4.4B. That with comparison to EPS of $1.55 on revenue of $3.81B in the same period a year before.

The company’s CEO Ajay Banga said on the earnings call, “We closed our 2019 on a strong note. And for the year, revenue was up 16% and EPS was up 23%, on a non-GAAP currency-neutral basis. I think these results reflect broad based growth across each of our regions and the ongoing execution of our strategy as we continue to invest for the longer term.”

“On the macroeconomic environment, consumer spending remains relatively healthy, and we expect this to continue in 2020. We are however monitoring, a number of economic and geopolitical factors as well as the potential effects of [Technical Issues] corona virus that could impact results. In the US, we are seeing stable growth with low unemployment and healthy consumer confidence. Our SpendingPulse estimates for Q4 show retail sales remained solid, up 3.1% versus the year ago ex auto, ex gas. In Europe, we see continued modest growth. UK spending actually held up reasonably well again, according to our SpendingPulse estimates with year-over-year retail sales up 3 [Technical Issues] in Q4 ex auto, gas and restaurants despite uncertainty around the potential impact of Brexit,” he added.

Disclaimer: We have no position in Mastercard Inc. (NYSE: MA) and have not been compensated for this article.