After-tax net income of $1.53 billion included a one-time gain of $409 million related to a transaction for American Express’s business travel operations. Expenses rose 2% to $5.9 billion due to increased marketing costs, including rewards costs. Operating expenses were lower, however on a gain from the business travel joint venture transaction that was partially offset by higher transaction related costs, a restructuring charge of $133 million and $40 million contribution to the company’s foundation.
Net income from the U.S. card services segment rose 12% to $782 million and international card services net income fell 13% to $142 million. Net income also rose in the global commercial services segment (+43%) and the global network and merchant services segment (+9%).
The company’s CEO said:
The strong underlying performance this quarter reflected a continuation of some familiar themes: higher Card Member spending, credit metrics at or near their historic lows, a modest increase in loan balances, continued success in containing operating expenses and a substantial return of capital to our investors through share repurchases. … Card Member spending rose 9 percent from year ago levels, and overall the growth rate accelerated from earlier this year, with higher volumes across each of our businesses in the U.S. and internationally.
For the 2014 fiscal year, consensus estimates call for EPS of $5.47 on revenue of $34.36 billion. The consensus third-quarter estimates call for EPS of $1.36 on revenues of $9.63 billion. Today’s report from American Express did not offer any guidance.
Shares rose about 0.3% to $91.97 in after-hours trading in the stock’s 52-week range of $71.47 to $96.24. Prior to today’s release Thomson/Reuters had a consensus price target of around $98.50 on the company’s shares.
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