Lower costs help MasterCard handily beat profit estimates

(Reuters) - MasterCard Inc , the world's No. 2 debit and credit card company, reported a better-than-expected quarterly profit as costs fell and shoppers spent more on its cards.

MasterCard's shares rose about 3.6 percent to a record-high of $93.59 in early trading on Wednesday. Larger rival Visa's shares also rose 1.7 percent.

"We are managing well, despite a mixed economic environment and challenging currency situation," Chief Executive Ajay Banga said in a statement.

Operating expenses fell about 1 percent to $879 million in the first quarter ended March 31.

The dollar <.DXY>, which has gained about 22 percent in the past 12 months against a basket of major currencies, has hurt U.S. multinational companies.

"(MasterCard) was able to overcome a drag from currency and grow volumes and earnings based on cost discipline," Wedbush Securities analyst Gil Luria said.

MasterCard and larger rival Visa Inc get more than 60 percent of their revenue from outside the United States, making them vulnerable to currency fluctuations. Visa is expected to report first-quarter earnings on Thursday.

American Express Co , the world's largest credit card issuer, said the dollar was partly to blame for its lower-than-expected quarterly revenue.

MasterCard's worldwide purchase volume increased 11.8 percent to $783 billion in local currency terms during the quarter, while cross-border volumes jumped 19 percent.

U.S. consumer confidence rebounded strongly in March amid optimism over the labor market and index of consumer attitudes rose to 101.3 in March from 98.8 in February.

Net revenue rose 2.7 percent to $2.23 billion.

The company's net income rose to $1.02 billion, or 89 cents per share, from $870 million, or 73 cents per share, a year earlier.

On an adjusted basis, the company earned 91 cents a share, including a 2-cent acquisition charge.

Analysts on average had expected earnings of 80 cents per share on revenue of $2.28 billion, according to Thomson Reuters I/B/E/S.

(Reporting by Neha Dimri in Bengaluru; Editing by Joyjeet Das and Saumyadeb Chakrabarty)