American Express Company ((AXP)) has held its Q3 earnings call. Read on for the main highlights of the call.
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American Express’ recent earnings call conveyed a positive sentiment, underscored by significant revenue and EPS growth, robust cardmember spending, and the successful launch of its refreshed Platinum card. Despite some pressures from immediate benefit costs and a modest gain from the Global Business Travel Group, the company’s financial and operational performance was notably strong.
Record Revenue and EPS Growth
American Express reported a remarkable 11% year-over-year increase in revenues, reaching a record $18.4 billion. Earnings per share (EPS) also saw a substantial rise, growing by 19% to $4.14. This growth underscores the company’s strong financial health and strategic execution.
Strong Cardmember Spending
Cardmember spending showed impressive acceleration, increasing by 9%, or 8% on an FX-adjusted basis. This growth was driven by strong retail spending and a notable rebound in travel, highlighting consumer confidence and spending power.
Platinum Card Refresh Success
The refreshed US Consumer and Business Platinum cards have been a resounding success, with new account acquisitions doubling in the first three weeks post-launch. This indicates strong customer demand and engagement, surpassing initial expectations.
International Spend Growth
International spending grew by 13% on an FX-adjusted basis, with three of the top five countries experiencing growth of 18% or more. This reflects American Express’ strategic focus on expanding its international market presence.
Excellent Credit Performance
Credit performance remained robust, with US consumer and small business delinquency rates still below 2019 levels. This strong credit performance is a testament to the company’s effective risk management strategies.
Capital Return to Shareholders
American Express returned $2.9 billion of capital to shareholders, including $2.3 billion in share repurchases. This capital return strategy underscores the company’s commitment to delivering value to its shareholders.
Pressure from Immediate Benefit Costs
The company faces some pressure from immediate benefit costs, as the costs occur immediately while fee revenue realization is lagged. This dynamic adds short-term pressure to expenses.
Small Gain from Global Business Travel Group
A transaction at the Global Business Travel Group contributed about $80 million, impacting the service fees and other revenue line growth. While modest, this gain is part of the company’s broader revenue strategy.
Forward-Looking Guidance
American Express raised its full-year guidance, projecting revenue growth of 9-10% and EPS between $15.20 and $15.50. This optimistic outlook is a reflection of the company’s strong financial performance this quarter and its strategic focus on premium products and international markets.
In summary, American Express’ earnings call highlighted a strong financial performance with record revenue and EPS growth, driven by robust cardmember spending and the successful launch of its refreshed Platinum cards. Despite some pressures from immediate benefit costs, the company’s strategic focus on premium products and international markets continues to drive growth, with a positive outlook for the future.