American Express Beats on Top and Bottom Lines

By Chris Lange Updated Jan 13, 10:31AM EST · Published Apr 20, 4:58PM EDT

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American Express Beats on Top and Bottom Lines — © Thinkstock

American Express Co. (NYSE: AXP) released its first-quarter earnings report after the markets closed on Wednesday. The company had $1.45 in earnings per share (EPS) on $8.09 billion in revenue versus Thomson Reuters consensus estimates that called for $1.35 in EPS on $7.99 billion in revenue. The same period from last year had $1.48 in EPS on $7.95 billion in revenue.

During this quarter, investment spending was up significantly, reflecting what management believes to be initiatives to grow the business by expanding its membership base and gaining a greater share of their overall spending and borrowing.

The company added 3 million new proprietary cards this quarter, with almost two thirds of the consumer acquisitions coming through digital channels. The underlying loan portfolio grew 11%.

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Amex reported the following segment results:

U.S. Card Services reported first-quarter net income of $694 million, up 5% from $659 million a year ago.
International Card Services reported first-quarter net income of $188 million, down 5% from $197 million a year ago.
Global Commercial Services reported first-quarter net income of $485 million, down 6% from $517 million a year ago.
Global Network & Merchant Services reported first-quarter net income of $357 million, down from $369 million a year ago.
Corporate and Other reported first-quarter net loss of $298 million. This compared to a net loss of $217 million a year ago.

Kenneth I. Chenault, Chairman and CEO of Amex, commented:

First quarter results were in line with the financial outlook we provided last month at our Investor Day. Despite strong competition throughout the payments industry, we generated a 4% increase in FX-adjusted revenues. Those revenues reflected strong, underlying growth in our lending portfolio, along with higher Card Member spending and fee income. Our 6 percent rise in Card Member spending was partially offset by a lower merchant discount rate and the higher costs associated with cash back rewards.

On the books, the company had $25 billion in cash and cash equivalents at the end of the quarter compared to $24 billion in the same period last year.

Shares of Amex closed Wednesday up 2.3% at $65.02, with a consensus analyst price target of $64.57 and a 52-week trading range of $50.27 to $81.92. Following the release of the earnings report the stock was up 3.3% at $67.16 in the after-hours trading session.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.