American Express (AXP) Earnings, Most Important Numbers Of The Quarter

By Douglas A. McIntyre Updated Apr 27, 3:47PM EDT · Published Jul 22, 5:11AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Americanexpresscardlarge_88180743_s While Wall St. was fixated on Apple’s (AAPL) numbers and the health outlook for Steve Jobs, American Express (AXP) slipped through the side door with some frightening numbers.

Apple’s earnings said something about the current economy. AXP’s said almost everything.

Apple did just fine in the last quarter. The consumer electronics phenom posted revenue of $7.46 billion and profits of $1.19 a share. Both beat Wall St. numbers. Mac sales were up an extraordinary 41%.

Looking forward to the September quarter, Apple said gross margins would fall to 31.5% compared to 34.8% in the most recent period. For the upcoming quarter, Apple said its expects revenue of $7.8 billion and profits of $1 a share, which is well below the analyst consensus of $8.32 billion and $1.24.

In other words, Apple expects its results to be lousy. The economy is slowing. It is any wonder?

The much more nerve-racking news came from American Express. Quarterly profit fell 38% for the last quarter. According to Reuters, "American Express set aside $1.889 billion during the quarter to cover losses, nearly double the $977 million it set aside the same quarter last year."

The credit card company also said its high end customers were spending less and taking longer to pay bills.

There have been many signs that consumer spending is falling fast and consumer credit defaults are rising. What has not been clear is that people who normally have money to spend are feeling very poor and are becoming deadbeats at a fairly alarming rate.

When the rich no longer feel rich, the economy has lost its last leg.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.