MasterCard Inc.'s (MA 0.18%) stock has lost more than 16% in value this year. Although the credit card company posted strong second quarter results with healthy increases in net revenues, earnings per share, and solid processed transaction growth, shares have largely disappointed investors. How come?

Solid business performance
If you look at MasterCard's second-quarter results, the company gave very few reasons for investors to get cranky: Net revenues increases a healthy 13% to $2.4 billion in both reported and currency-adjusted terms, and its diluted EPS gained an equally impressive 14% year over year.

Source: 401kcalculator.org

Other key performance indicators also looked solid. Processed transactions grew 12% over last year's to a massive 10.6 billion, and MasterCard could present investors with 8% card growth over the same time period.

But MasterCard didn't stop right there. In addition to solid financial results, the credit card company also issued an upbeat outlook in terms of revenue and earnings growth for the near future: On an adjusted-basis (that is, excluding business acquisitions and in constant currencies), MasterCard expects to deliver annual growth  of 11%-14% in terms of net revenues and "at least 20%" annual growth in EPS from 2013-2015.

As respectable as those results -- as well as MasterCard's outlook -- were, investors still decided they wanted none of it. And a lot of it had to do with a worsening geopolitical situation in 2014.

Sanctions war hurting MasterCard
Credit card issuers and payment processors like MasterCard, Visa (V 2.39%), and American Express Company (AXP 0.04%) do their best business when consumers have no worries and are busy swiping their credit cards.

MasterCard and its credit card peers are true multinational companies with a lot of international exposure, however. So any geopolitical crisis erupting anywhere in the world has the potential to have a negative affect on MasterCard. And the main hot spot this year was Ukraine.

First, Russia annexed Crimea, a region Russia has always seen as part of its heartland, earlier this year, and subsequently engaged in covert and not-so-covert support of pro-Russian separatists in eastern Ukraine, who where openly fighting the Ukrainian government.

The military confrontation alone was not enough to send investors for the hills, although the conflict clearly had the potential to spiral out of control. But the resulting sanctions from the West certainly influenced investors. While sanctions were initially only targeting certain individuals within Putin's inner circle, a sanctions war quickly ensued, with the U.S. and the European Union sanctioning Russia's state banks and its important oil sector.

The political and economic confrontation between the West and Russia also prompted MasterCard CEO  Ajay Banga to warn investors in the company's first-quarter earnings call about risks pertaining to its Russian presence:

Over the past few years, we have made a lot of good progress in Russia, although it represents only a little over 2% of our total revenue. The sanctions have had a significant impact in that market, not as much from an immediate financial standpoint for MasterCard but rather on the ground where the Russian government is working to implement legislation to change their domestic payments market structure.

Russia ultimately returned the favor and proceeded with legislation to counter Western sanctions with an amendment to its national payment system law that required MasterCard and Visa to shell out $3 billion in "security fees" in order to make sure that both companies could maintain their operations in Russia.

Further, the Russian government's actions with respect to U.S. credit card companies actually caused Morgan Stanley, a leading Wall Street research institution, to recommend that credit card companies would actually be better off leaving the Russian market altogether instead of paying and staying.

All of that did not contribute to investors gravitating toward MasterCard. The recent equity sell-off, which started in September, also contributed negatively to MasterCard's year-to-date performance.

Sanctions unlikely to persist over the long term
Sanctions are never good for business, nor are they good for consumers who'd likely face fewer options, higher prices, and less service quality if MasterCard and Visa were to be cut from Russia's payment system.

However, as the sanctions dust settles and both parties realize that they are better off with collaboration instead of confrontation, a lot of the recent uncertainty could evaporate about as quickly as it emerged.

The Foolish takeaway
MasterCard turned from a major winner in 2013 -- MasterCard's stock gained 70% last year -- to an underperformer in 2014: it lost 16% in value, while the S&P 500 gained at least 1.4%. However, MasterCard's underperformance has had a lot to do with developments the company couldn't control.

At the moment, both the West and Russia are playing the sanctions game, but both sides know that nobody wins in a sanctions war. Over time, sanctions should gradually be lifted as common sense returns and long-term economic partnership interests are accentuated. And this might just be the time when MasterCard's stock turns from loser to winner again.