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MasterCard (MA) Board Approves $2B Share Repurchase Program; Doubles Div

 February 05, 2013 10:00 AM

(By Balaseshan) Payment processing firm MasterCard Inc. (NYSE: MA) said its board of directors has increased its quarterly dividend and approved $2 billion class A common share repurchase program.

"Our strong financial performance allows us to increase the return of cash to shareholders through our dividend and share repurchase programs. We remain focused on executing our strategy and growing our business for the future," said Ajay Banga, president and CEO of MasterCard.

The Purchase, New York-based company said its board has raised its quarterly cash dividend to 60 cents per share, doubling the previous dividend level of 30 cents per share.

[Related -Mastercard Inc (MA) Q3 Earnings Preview: What To Expect?]

The dividend will be paid on May 9 to holders of record of its Class A common stock and Class B common stock as of April 9, the company noted.

The board also approved a new share repurchase program authorizing MasterCard to repurchase up to $2 billion of its Class A common stock.

The new share repurchase program will become effective at the completion of the company's $1.5 billion buyback program. As of January 25, 2013, the company had about $440 million remaining under the current program authorization.

On January 31, MasterCard posted better-than-expected quarterly profit on strong growth in card payments. The company recorded an increase in processed transactions of 20 percent to 9.2 billion, with cross-border volumes edging up 17 percent.

[Related -VeriFone Systems Inc (PAY): Buy This Leader In Mobile Payments On Its 55% Pullback]

The company earned $605 million or $4.86 a share for the fourth quarter, compared to $19 million or 15 cents a share last year when it took a $770 million litigation charge. Net revenue rose 10 percent to $1.9 billion. Adjusted for currency, net revenue increased 12 percent.

During the fourth quarter of 2012, MasterCard repurchased 1.3 million shares of class A common stock at a cost of about $613 million. Quarter-to-date through January 25, the company repurchased an additional 322,000 shares at a cost of about $165 million.

MA is trading up 1.01% at $519.40 on Tuesday. The stock has been trading between $387.00 and $535.35 for the past 52 weeks.

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