Consumers keep shopping and traveling and that translated to
American Express
announcing its sixth consecutive quarter of record revenue Friday.
The stock rose 1% in premarket trading, but fell later in the session.
Revenue at
American Express
(ticker: AXP) climbed 13% from the year-ago quarter to $15.4 billion, which was in-line with estimates of analysts surveyed by FactSet. Profit topped expectations growing 30% to $2.45 billion, amounting to earnings of $3.30 a share, another record for American Express. Analysts had been projecting that Amex would earn $2.95 a share.
Total card member spending climbed 7% to $420 billion on a currency-adjusted basis. In the U.S., card spending climbed 9% year over year, while the company’s international segment saw a 15% increase in spending after adjusting for currency.
American Express noted that households and businesses have not lost their propensity to spend on going out with travel and entertainment expenditures climbing 13%, helped in large part by restaurant spending.
The company also was optimistic about its continued ability to court younger clients. Millennial and Gen Z customers are American Express’s fastest growing demographic, with spending up 18% year over year and the group accounting for 60% of new accounts.
While touting record results, AmEx also noted that credit quality remained strong with net write-off and delinquency rates still below pre-pandemic levels. Still, the provision for credit losses grew 58% to $1.2 billion from the year-ago quarter due to a higher level of write-offs. American Express noted, however, that its net reserve build for the quarter was $321 million, down from $387 million a year ago, implying a slightly improved credit outlook.
“We believe we are well positioned as we seek to achieve our long-term growth plan aspirations in 2024 and beyond in a steady-state macro environment,” Stephen Squeri, chief executive at Amex, said Friday.
Write to Carleton English at [email protected]
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