Banking, finance, and taxes

What to Expect When American Express Reports on Friday

Chris Lange

Published: July 18, 2019 11:35 am

Last Updated: January 30, 2020 6:24 pm

American Express Co. (NYSE: AXP) is scheduled to release its second-quarter financial results before the markets open on Friday. The consensus estimates call for $2.04 in earnings per share (EPS) and $10.82 billion in revenue. The same period of last year reportedly had $1.84 in EPS and $10 billion in revenue.

In the first quarter, Amex said that consolidated total revenues net of interest expense increased 7% year over year. Excluding the impact of foreign exchange rates, adjusted revenues net of interest expense grew 9%. The increases were broad-based and reflected higher card member spending, loan volumes and fee income.

Consolidated provisions for losses were $809 million, up 4% from $775 million a year ago. The increase reflected continued growth in the loan and receivable portfolios and higher net lending write-offs, partially offset by a smaller reserve build compared to a year ago.

In terms of its first quarter, Amex reported as follows:

• Global Consumer Services Group reported first-quarter net income of $821 million, down 1% from $826 million a year ago.
• Global Commercial Services reported first-quarter net income of $586 million, up 7% from $546 million a year ago.
• Global Merchant and Network Services reported first-quarter net income of $631 million, up 22% from $516 million a year ago.
• Corporate and Other reported first-quarter net loss of $489 million, compared with a net loss of $254 million a year ago

Excluding Thursday’s move, Amex had outperformed the broad markets, with its stock up about 33% year to date. In the past 52 weeks, the stock was up closer to 26%.

A few analysts weighed in on Amex ahead of the report:

• Wells Fargo has an Outperform rating and a $140 price target.
• Deutsche Bank has a Buy rating with a $142 price target.
• Merrill Lynch has a Buy rating with a $145 price target.
• Jefferies has a Hold rating with a $130 price target.
• William Blair has an Outperform rating.

Shares of Amex traded up about 0.5% at $127.76 on Thursday, in a 52-week range of $89.05 to $129.34.