AMEX beats Wall Street expectations in Q3
By Robert Davis
20:25, 22 October 2021
Shares of American Express (AMEX) were up 5.37% on Friday to $187 (£135.94) after the company announced its fiscal Q3 earnings beat Wall Street's estimates.
Over the last month, AMEX shares have gained more than 7.8% in value. They’ve increased by nearly 30% in the last six months and are up 58.4% so far this year.
Earnings details
According to AMEX’s Q3 earnings statement, the company brought in $1.8bn in revenue compared to the $1.07bn it brought in during Q3 2020.
This revenue translated to EPS of $2.27 compared to the $1.30 per share AMEX paid out last year.
Five analysts at MarketBeat estimated AMEX would report EPS of $1.72, meaning the company posted a surprise factor of more than 25%.
AMEX said in its earnings statement that the increase in revenue was primarily driven by an increase in network volumes when compared to 2020.
However, the company’s total expenses also increased to $2.6bn, up 29% from last year because of higher member spending.
AMEX CEO Stephen Squeri described the company’s Q3 performance as one that reflects “accelerating momentum in our core business and outstanding credit performance, enabled by the strategic decisions we’ve made over the last several years.”
“We’re operating from a position of strength, and we see more opportunity ahead to drive sustainable, long-term growth. With the progress we’ve made against our key priorities this year, we remain confident in our ability to be within the high end of the range of the EPS expectations we had for 2020 in 2022,” Squeri said.
What is your sentiment on AXP?
Outlook
The company expects to see solid growth in the future driven primarily by the investments its made in attracting young consumers to their products.
Spending by Millennial and Gen Z card members grew 38% above Q3 2019 levels…We acquired 2.6 million new proprietary cards in Q3, with acquisitions of our US consumer and small business Platinum and Gold cards reaching all-time highs while our card member retention and satisfaction metrics are better than pre-pandemic levels,” Squeri said.
Read more: American Express to launch new online bank payment service
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