NEW YORK (Reuters) - MasterCard Inc <MA.N> posted quarterly earnings that fell short of Wall Street forecasts due to higher-than-expected costs, sending its shares down nearly 7 percent in premarket trade.
The world's No. 2 credit card network also logged an after-tax severance charge that shaved earnings by 19 cents per share.
MasterCard earned $294.4 million, or $2.24 per share, in the fourth quarter, up from $239.4 million, or $1.83 per share, a year earlier.
Analysts on average expected $2.46 per share, according to Thomson Reuters I/B/E/S.
Revenue was up 6 percent at $1.30 billion, meeting expectations, as a rebound in credit card and debit card spending yielded a 6.7 percent jump in transactions processed.
Operating expenses grew 9.8 percent in the holiday-season quarter, on the back of a 25 percent spike in advertising and marketing expenses. Expenses were higher than most analysts expected.
MasterCard shares were down $17.08 at $230.50 in premarket trade. Prior to Thursday, they had risen more than 50 percent in the last 12 months, approaching their all-time high of $320.30, reached in 2008.
Rather than issuing credit cards or processing transactions, MasterCard and its peers operate the networks of payment and have grown as shoppers globally increasingly replace cash and checks with plastic.
MasterCard's closely-watched gross dollar volume figure was up 5.3 percent in the quarter, boosted by higher U.S. gasoline prices and a weaker U.S. dollar compared with a year earlier. MasterCard results benefit from the weaker dollar when the company converts non-U.S. revenue into dollars.
Larger rival Visa Inc <V.N> reported better-than-expected quarterly profit on Wednesday, boosted by debit card volumes.
(Reporting by Jonathan Spicer, editing by Gerald E. McCormick and John Wallace)