February 1, 2018 / 1:39 PM / 10 months ago

UPDATE 3-Holiday cheer lifts Mastercard's profit above Street

* Shares hit record high

* Adj. EPS of $1.14 vs analysts' estimate of $1.12

* Books charge of $981 mln, mostly due to U.S. tax code (Adds fourth-quarter and conference call details, updates share move)

By Aparajita Saxena

Feb 1 (Reuters) - Mastercard Inc's quarterly profit topped estimates on Thursday, boosted by a busy holiday shopping period that saw more people swiping credit and debit cards for larger sums.

The company's shares rose 4.4 percent to an all-time of $176.52.

Growth in the U.S. economy over the last quarter also helped the world's No. 2 payments network, which, like bigger rival Visa Inc largely banks on the health of the economy and customers' willingness to loosen purse strings in order to generate revenue from credit- and debit-card transactions.

U.S. consumer spending, which accounts for more than two-thirds of the country's economic activity, accelerated at a 3.8 percent annualized rate in the fourth quarter, the fastest in three years, as household incomes continued inching up.

Outside the United States too, Mastercard has a strong presence. Cross-border volumes - the value of transactions made by overseas cardholders - rose 22.4 percent on a U.S. dollar-converted basis in the fourth quarter.

Europe, and the Asia Pacific, Middle East and Africa (APMEA) region accounted for majority of the cross-border volumes, Chief Financial Officer Martina Hund-Mejean said.

Around 1 percent point growth in overseas volumes came from "cardholders funding accounts and cryptocurrency exchanges, which was then used to purchase digital currencies", Hund-Mejean said on a post-earnings call with analysts.

Gross dollar volume - the value of transactions processed - was the highest in the Asia Pacific, Middle East and Africa region, and superseded that in the United States.

In APMEA, the value of transactions processed came in at $435 billion, versus $423 billion in the United States alone.

"Payment volumes (for Mastercard) will stay healthy, we think, and a more sustained global economic recovery could eventually lead to an acceleration of spending and further revenue growth," CFRA analyst Scott Kessler wrote in a note.

Net income fell 76 percent to $227 million, or 21 cents per share, in the quarter ended Dec. 31, as the company booked $981 million in charges, primarily due to the U.S. tax reform. (mstr.cd/2nwXaUZ)

Excluding items, Mastercard earned $1.14 per share, beating the average analyst estimate of $1.12, according to Thomson Reuters I/B/E/S.

The company's net revenue jumped 20.2 percent to $3.31 billion.

Reporting By Aparajita Saxena in Bengaluru; Editing by Martina D'Couto and Maju Samuel

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