The Zacks Analyst Blog Highlights: MasterCard, Telefonica S.A., Visa, American Express and H&R Block

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Feb 28, 2012, 09:30 ET

CHICAGO, Feb. 28, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include MasterCard Inc. (NYSE: MA), Telefónica S.A. (NYSE: TEF), Visa Inc. (NYSE: V), American Express Co. (NYSE: AXP) and H&R Block (NYSE: HRB).

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Here are highlights from Monday's Analyst Blog:

MasterCard, Telefonica Join Forces

Last week, MasterCard Inc. (NYSE: MA) and Telefónica S.A. (NYSE: TEF) announced its joint venture (JV) under the corporate name – Wanda with tagline "Your Mobile Money." This reflects one more step taken by the company toward boosting its mobile commerce (mCommerce) vigorously.

MasterCard had formed a JV with Brazil-based telecom operator Telefónica in November last year with the objective to penetrate emerging markets. The JV will be owned by both the parties equally.

Accordingly, Wanda has been built through the JV to explore mobile financial services in the 12 markets of Latin America. Telefónica already operates through its Movistar brand in these markets. Thus, Wanda will operate in these markets to offer mobile payment solutions to over 87 million Movistar customers. Besides, Mobile Payment Solutions (MPS), with whom Wanda has a global agreement covering the 12 Latin American markets, will aid the development and implementation of the mobile wallet technology and its services.

Additionally, Wanda will be connected to mobile wallet and prepaid accounts that will be accessible globally across mobile networks. Of late, mobile banking has come up with a profound scope of providing the consumers with a convenient, user-friendly, value-for money, transparent and secure mode of making transactions, which include person-to-person payments, bill payments, adding cell phone minutes and other banking services.

Moreover, while a sophisticated banking platform is yet to be established in most of the economies of Latin America, Africa, Middle East and Asia, mobile phones have penetrated even the remotest zones of these emerging markets.

Overall, we believe that these efforts apart from showering ample organic growth opportunities will also become a part of MasterCard's long-term growth. Furthermore, this will also enhance the company's operating and competitive leverage in the upcoming quarters. Such business diversification is also expected to augment MasterCard's core processing capabilities in an increasingly complex payments environment, thereby reflecting its endeavors to adapt itself to the emerging industry trends.

Besides, other card giants such as Visa Inc. (NYSE: V) and American Express Co. (NYSE: AXP) are also seeking greener pastures through newer initiatives, including the expansion into prepaid cards, mobile banking and eCommerce, given the regulatory clouds hovering over the credit and debit card businesses.

MasterCard carries a Zacks Rank #3, implying a short-term Hold rating along with a Neutral stance over the long term.

H&R Block Shows Growth Pre-Earnings

H&R Block (NYSE: HRB) announced its total tax returns prepared grew 6.7% for the first of three interim period ending February 15.

Total digital tax returns grew 16.7%, drive by an increase of more than 24% in online filings. Total retail returns were prepared to grow 2.1%.

H&R Block remains focused on increasing new client growth. The company finalized on five drivers that would help it to grow the number of new clients. These efforts helped the company to gain market share in the digital space. In 2011, total returns prepared increased 6% over 2010, while in the U.S. it increased to a record 6.5%since 2001. The company's client base in digital increased by 800,000, with online growth of about 29% while in retail, Tax Services clients grew more than 500,000.

Also, H&R Block has a sustained focus on expense reduction. The company expects realigning its field and corporate support organization to save $100−$150 million by the end of fiscal 2012.

H&R Block's adjusted loss of 38 cents per share in fiscal second-quarter was wider than the Zacks Consensus Estimate of a loss of 35 cents and year-ago loss of 36 cents.

The Zacks Consensus Estimate for fiscal third-quarter 2012 is 9 cents per share. For fiscal years 2012 and 2013, the Zacks Consensus Estimates are a respective $1.46 and $1.67. H&R Block is scheduled to release its fiscal third quarter earnings results on March 9 after the bell.

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