Key things
- American Express reported record sales but still fell short of forecasts.
- Growth in total network volumes slowed after several quarters of double-digit percentage growth.
- The firm has set aside $1.2 billion to cover potential customer defaults.
American Express (AXP) was the worst-performing stock in the Dow as the credit card provider’s revenue missed analysts’ estimates and the network’s overall volume growth slowed. The company also set aside more money for potential customer defaults.
Shares fell 3.9% even as revenue of $15.1 billion hit an all-time high. Earnings of $2.89 per share were also a record and exceeded forecasts.
Cardholder spending rose 8% to $426.6 billion, but that came after several consecutive quarters of double-digit percentage expansion.
The company said it made a $1.2 billion allowance for loan losses, which was about three times higher than in the same period in 2022. That reflected higher net write-downs and provisioning, according to American Express.
American Express also reiterated its full-year outlook it gave earlier in the year for earnings per share (EPS) of $11 to $11.40 and revenue growth of 15% to 17%.
Despite Friday’s losses, American Express shares are up 15% so far.
YCharts
