PURCHASE, N.Y.—Mastercard beat estimates for quarterly profits as consumer spending surged, but the card company's disclosure of a probe by the U.S. Justice Department has unnerved investors, according to a new report.
The regulator has demanded Mastercard provide documents tied to its U.S. debit program and competition with other payments networks, the card company said, according to Reuters. Visa reported a similar probe in January.
Shares of Mastercard pared gains to 1% from as much as 2.2% after the company forecast strong growth in the face of inflation.
“Mastercard bet on resilient consumer spending through the year, as rising interest rates and stubborn inflation have had little impact on wealthier consumers who continue to spend on travel and entertainment,” Reuters said.
‘Remarkably Resilient’
Added Mastercard CEO Michael Miebach on an earnings call, "Consumer spending has remained remarkably resilient, and that despite continued economic uncertainty.”
He added that while there are signs of inflation cooling, the banking sector has come under pressure.
Pent-up demand from consumers also helped Mastercard, driving a 35% surge in cross-border volumes—a gauge of travel demand that tracks spending on cards beyond the country of its issue, Reuters noted.