American Express sees continued spending recovery as earnings easily exceed expectations

Date:

American Express Co. outperformed Friday’s earnings and earnings estimates as it benefited from accelerated spending and saw further recovery in the travel and entertainment category, which was hit hard early in the pandemic.

The company’s third-quarter net income increased from $ 1.1 billion ($ 1.30 per share) in the year-ago quarter to $ 1.8 million ($ 2.27 per share). Analysts tracked by FactSet expected $ 1.80 per share.

American Express
AXP,
-1.19%

Revenue after deducting interest expense increased from $ 8.8 billion to $ 10.9 billion, while analysts modeled $ 10.5 billion. Cardholder spending has accelerated, rising 19% compared to the third quarter of 2019, the company said in a release.

Stocks rose 0.3% in pre-market trading.

The company has benefited from “a continuous recovery in travel and entertainment spending,” CEO Stephen Skeri said in a release. Restaurant spending was “significantly resilient” and showed growth above pre-pandemic levels.

Amex also emphasized that millennial and Gen Z cardholder spending increased 38% compared to the third quarter of 2019, and efforts are underway to attract younger customers. Record highs for US consumer and small business acquisitions of Platinum and Gold Cards.

“We are doing business from a strong standpoint and we see more opportunities to drive sustainable and long-term growth,” said Sukeri. “We are confident in our ability to stay within the EPS range expected for 2022 and 2020,” Amex said.

The company’s third-quarter consolidated allowance for doubtful accounts was a profit of $ 191 million, compared with a provision of $ 665 million in the year-ago quarter. Amex said the change primarily reflected the release of an allowance for doubtful accounts of $ 393 million and a decrease in net amortization over the most recent period.

American Express share has increased 3.8% over the past three months on average for the Dow Jones Industrial Average
DJIA,
-0.02%

It is up 2.2%.

American Express sees continued spending recovery as earnings easily exceed expectations

Source link American Express sees continued spending recovery as earnings easily exceed expectations

The post American Express sees continued spending recovery as earnings easily exceed expectations appeared first on Eminetra.

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