American Express Co’s (NYSE:AXP) third-quarter revenue (net of interest expense) grew 8% year-on-year to $16.64 billion, marginally missing the analyst consensus estimate of $16.67 billion.
The rise was primarily because of higher net interest income, increased Card Member spending, and continued strong card fee growth.
Amex’s stock price went up after the report, but it surely soon gave up the gains within the premarket session on Friday.
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Adjusted EPS of $3.49 beat the analyst consensus estimate of $3.28.
Card Member spending or Billed Business grew 6% (or 6% forex adjusted) year-over-year to $387.3 billion.
U.S. Consumer Services revenue was $7.944 billion, up 10% yr over yr. Business Services revenue was $3.998 billion, up 7% yr over yr.
International Card Services revenue was $2.936 billion, up 11% yr over yr, and Global Merchant and Network Services revenue was $1.847 billion, flat yr over yr.
Total expenses increased by 9% yr over yr to $12.1 billion, primarily reflecting higher customer engagement costs because of higher Card Member spending, increased usage of travel-related advantages, and better marketing investments.
Provision for credit losses stood at $1.4 billion, compared with $1.2 billion a yr ago, reflecting higher net write-offs.
FY24 Outlook: Amex expects revenue growth of 9% or $65.96 billion (versus prior expectations of 9%–11% or $65.96 billion–$67.17 billion) versus consensus of $65.97 billion. It has raised its EPS outlook to $13.75–$14.05 (from $13.30–$13.80 prior) versus the consensus of $13.14.
In August, B of A Securities analyst Kenneth Bruce downgraded American Express, citing continued inflation and the upper rate environment affecting consumer demand. He didn’t expect the corporate to deliver its previously guided 9%- 11% revenue growth for fiscal 2024.
A minimum of 3 Wall Street firms, including JP Morgan, HSBC, and BTIG, downgraded the stock in October.
American Express stock is up 89% within the last 12 months.
Price Motion: AXP stock is down 2.79% at $277.80 premarket on the last check on Friday.
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This text American Express Q3 Earnings: Profit Beats Estimate, Card Spending Grows, Revises Annual Outlook originally appeared on Benzinga.com
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