American Express Company (AXP) posted a revenue of $13.56 billion, 24% higher than last year with an EPS of $2.47.
American Express Company (AXP) posted a revenue of $13.55 billion for the quarter ending 30 September 2022, 24% higher than last year for the same quarter, edging 1% above the previous quarter, and beating analysts’ estimate of $13.49. Revenue was up primarily due to increased Card Member Spending, rising by 21%. Stephen J. Squeri, Chaiman and CEO attributed on the company’s results on the improved performance of the travel industry leading to higher spending, and a growth in international market transactions, “The demand for travel has exceeded our expectations throughout the year, with spending on T&E increasing 57 percent from a year earlier and T&E spending volumes in our international markets surpassing pre-pandemic levels for the first time this quarter, both on an FX-adjusted basis.”
AXP reported a net income of $1.85 billion, beating expectations and year-on-year results by 3%. Net income for the quarter fell below the previous quarter’s $1.93 billion due to higher-than-expected provision for credit losses of $778M, 35% higher than analyst estimate of $573. The company cited rising interest rates to be the cause of future charge offs.
The company provided guidance on revenue to rise by 23%-25% to range between $52.1 billion to $53 billion, while improved on the original EPS guidance to $9.25 to $9.65. AXP gave investors a positive outlook on the next two years stating “higher than long-term aspirational levels of revenue growth”.
EPS was $2.47, just beating estimates of $2.4, and up 9% from the same quarter last year, but down -4% from the previous quarter. The company’s stock price slid 5.2% in Friday premarket trading as the credit card company boosted its provision for credit losses amid the uncertain economic outlook, to close at $140.04. Analysts on Wall Street hold a moderate view of the stock, with 50% recommending a buy position, 43% recommending hold, with the remaining 7% recommending sell with a consensus twelve-month price target of $165.95.
