Baird: Mastercard's Growth 'Is A Little Bit Slower,' Next Year 'Should Have Nice Acceleration'

Mastercard Inc MA came out second quarter earnings earlier on Wednesday that were slightly below expectations. The company reported EPS of $0.81 on revenue of $2.39 billion, while analysts were expecting EPS of $0.85 on revenue of $2.41 billion.

David Koning, senior research analyst at Robert W. Baird, was on CNBC to weigh in on MasterCard's numbers.

Down The Fairway

"I think this quarter should be basically down the fairway," Koning began. "I mean we've already seen Visa report good results, Global Payments yesterday TSYS (Total System Services, Inc.). It should be a good quarter for the payments companies and it looks like another good quarter for MasterCard."

Growth

On the company's growth going forward, Koning said, "This year growth is a little bit slower. It's weighed down by currency, it's weighed down by clients incentives; because they had such strong deal signings they actually pay rebates back."

"So this year is weighed down by a couple of those things. As we look to next year, we should have nice acceleration. The core business doing well, the new contract signed should help out. Should be a good year as we go into next year."

FX Impact

Koning was asked what kind of impact did strength of the dollar had on the company. He replied, "So first of all, the core trends are all around the 10 percent growth. The economy is holding up well enough for the company to do well. Because almost two-thirds of the revenue is outside the U.S. that is having a big impact. I'd have to look at their numbers, but I think it's something like a 5 percent impact on the revenue this year. So it is pretty imperial."