American Express Raises Full-Year Earnings Per Share Guidance
American Express (NYSE: AXP) reported strong Q2 2024 results, with net income of $3.0 billion and EPS of $4.15, up 44% year-over-year. Excluding a $0.66 gain from the sale of Accertify, adjusted EPS was $3.49, up 21%. Revenue reached a record $16.3 billion, up 8% (9% FX-adjusted). The company raised its full-year EPS guidance to $13.30-$13.80 from $12.65-$13.15 previously.
Key highlights include:
- Billed business up 5% (6% FX-adjusted) to $388.2 billion
- 3.3 million new card acquisitions
- 24th consecutive quarter of double-digit card fee revenue growth
- Excellent credit performance
- 15% increase in marketing investments planned
- Record quarterly revenue of $16.3 billion, up 8% (9% FX-adjusted)
- EPS increased 44% to $4.15, or 21% to $3.49 excluding transaction gain
- Full-year EPS guidance raised to $13.30-$13.80
- 3.3 million new card acquisitions
- 24th consecutive quarter of double-digit card fee revenue growth
- Excellent credit performance, described as 'best in class'
- 15% increase in marketing investments planned without using transaction gain
- Consolidated provisions for credit losses increased to $1.3 billion from $1.2 billion a year ago
- Higher net write-offs reported, partially offset by lower reserve build
American Express reporting a 44% increase in its Q2 earnings per share (EPS) to
The company’s revenue growth to
However, the provision for credit losses is also up, reaching
Additionally, lowering the average diluted common shares outstanding by
The raised full-year EPS guidance to
From a market perspective, American Express’s performance shows a strategic alignment with consumer spending trends. The 6% growth in billed business and double-digit increases in card fee revenues highlight consumer confidence and spending behavior. These metrics are essential as they forecast continued consumer engagement and revenue growth.
The sale of Accertify, contributing a gain of
The ongoing increase in marketing investments by around
However, the slight increase in consolidated expenses to
Q2 EPS Increased
Revenue Grew
(Millions, except per share amounts, and where indicated) |
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Quarters Ended June 30, |
Percentage Inc/(Dec) |
Six Months Ended June 30, |
Percentage Inc/(Dec) |
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2024 |
2023 |
2024 |
2023 |
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Billed Business (Billions) FX-adjusted 2 |
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Total Revenues Net of Interest Expense FX-adjusted 2 |
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Net Income |
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Diluted Earnings Per Common Share (EPS) 3 |
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Adjusted EPS Excluding Transaction Gain 1 |
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Average Diluted Common Shares Outstanding |
717 |
741 |
(3)% |
719 |
742 |
(3)% |
“We delivered strong second-quarter results, with quarterly revenue reaching an all-time high of
“Based on the strong performance of our core business, we believe we can increase our marketing investments by around 15 percent over last year without using any of the transaction gain, while still delivering exceptional earnings results this year. As a result, we have made the decision to drop the entire gain to the bottom line and are raising our full-year EPS guidance to
"Since the end of 2021, we have significantly grown the scale of our business, increasing revenues by nearly 50 percent and Card Member spending by almost 40 percent, while adding around 23 million new cards and over 30 million merchant locations.4 This increased scale, combined with our premium, high credit quality customers, our well-controlled expense base and our successful investments to continuously enhance our Membership Model, fuels the earnings power of the core business and reinforces our confidence in our ability to deliver strong bottom-line growth.”
Second-quarter consolidated total revenues net of interest expense were
Consolidated provisions for credit losses were
Consolidated expenses were
The consolidated effective tax rate was 20.4 percent, compared to 20.5 percent a year ago, reflecting discrete tax benefits in both periods.
This earnings release should be read in conjunction with the company’s statistical tables for the second quarter 2024, which include information regarding our reportable operating segments, available on the American Express Investor Relations website at http://ir.americanexpress.com and in a Form 8-K furnished today with the Securities and Exchange Commission.
An investor conference call will be held at 8:30 a.m. (ET) today to discuss second-quarter results. Live audio and presentation slides for the investor conference call will be available to the general public on the above-mentioned American Express Investor Relations website. A replay of the conference call will be available later today at the same website address.
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1 |
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Adjusted diluted earnings per common share, a non-GAAP measure, excludes the |
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2 |
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As used in this release, FX-adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translations into |
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3 |
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Diluted earnings per common share (EPS) was reduced by the impact of (i) earnings allocated to participating share awards of |
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4 |
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The 30 million new merchant locations include approximately 14 million registered merchant locations in |
As used in this release:
- Card Member spending (billed business) represents transaction volumes, including cash advances, on payment products issued by American Express.
- Operating expenses represent salaries and employee benefits, professional services, data processing and equipment, and other, net.
- Reserve releases and reserve builds represent the portion of the provisions for credit losses for the period related to increasing or decreasing reserves for credit losses as a result of, among other things, changes in volumes, macroeconomic outlook, portfolio composition, and credit quality of portfolios. Reserve releases represent the amount by which net write-offs exceed the provisions for credit losses. Reserve builds represent the amount by which the provisions for credit losses exceed net write-offs.
- Variable customer engagement costs represent the aggregate of Card Member rewards, business development, and Card Member services expenses.
ABOUT AMERICAN EXPRESS
American Express is a globally integrated payments company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at americanexpress.com and connect with us on facebook.com/americanexpress, instagram.com/americanexpress, linkedin.com/company/american-express, X.com/americanexpress, and youtube.com/americanexpress.
Key links to products, services and corporate sustainability information: personal cards, business cards and services, travel services, gift cards, prepaid cards, merchant services, Business Blueprint, Resy, corporate card, business travel, diversity and inclusion, corporate sustainability and Environmental, Social, and Governance reports.
Source: American Express Company
Location: Global
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. The forward-looking statements, which address American Express Company’s current expectations regarding business and financial performance, including management’s outlook for 2024 and long-term growth aspiration, among other matters, contain words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “continue” and similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update or revise any forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, those that are set forth under the caption “Cautionary Note Regarding Forward-Looking Statements” in the company’s current report on Form 8-K filed with the Securities and Exchange Commission (SEC) on July 19, 2024 (the Form 8-K Cautionary Note), which are incorporated by reference into this release. Those factors include, but are not limited to, the following:
• the company’s ability to achieve its 2024 earnings per common share (EPS) outlook and grow EPS in the future, which will depend in part on revenue growth, credit performance and the effective tax rate remaining consistent with current expectations and the company’s ability to continue investing at high levels in areas that can drive sustainable growth (including its brand, value propositions, customers, colleagues, marketing, technology and coverage), controlling operating expenses, effectively managing risk and executing its share repurchase program, any of which could be impacted by, among other things, the factors identified in the subsequent paragraphs and the Form 8-K Cautionary Note, as well as the following: macroeconomic conditions, such as recession risks, higher rates of unemployment, changes in interest rates, effects of inflation, supply chain issues, energy costs and fiscal and monetary policies; geopolitical instability, including the ongoing
• the company’s ability to achieve its 2024 revenue growth outlook and grow revenues net of interest expense in the future, which could be impacted by, among other things, the factors identified above and in the Form 8-K Cautionary Note, as well as the following: spending volumes and the spending environment not being consistent with expectations, including T&E spend categories growing slower than expected, further moderation in spending by
• the actual amount the company spends on marketing in 2024 and beyond and the effectiveness and efficiency of its marketing spending, which will be based in part on continued changes in the macroeconomic and competitive environment and business performance, including the levels of demand for the company’s products; management’s decisions regarding the timing of spending on marketing and the effectiveness of management’s investment optimization process; management’s identification and assessment of attractive investment opportunities; management’s ability to develop premium value propositions and drive customer demand, including continued customer spend growth and retention; the receptivity of Card Members and prospective customers to advertising and customer acquisition initiatives; and the company’s ability to realize marketing efficiencies and balance expense control and investments in the business.
A further description of these uncertainties and other risks can be found in American Express Company’s Annual Report on Form 10-K for the year ended December 31, 2023, Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and the company’s other reports filed with the SEC, including in the Form 8-K Cautionary Note.
(Preliminary) |
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American Express Company |
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Appendix I |
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Reconciliation of Adjusted EPS Excluding Transaction Gain |
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Quarters Ended June 30, |
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Six Months Ended June 30, |
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2024 |
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2023 |
YoY% Inc/(Dec) |
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2024 |
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2023 |
YoY% Inc/(Dec) |
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GAAP Diluted EPS |
$ |
4.15 |
|
$ |
2.89 |
44 |
% |
|
$ |
7.48 |
|
$ |
5.29 |
41 |
% |
Accertify Gain on Sale (pretax) |
$ |
0.73 |
|
$ |
— |
|
|
$ |
0.73 |
|
$ |
— |
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Tax Impact of Accertify Gain on Sale |
$ |
(0.07 |
) |
$ |
— |
|
|
$ |
(0.07 |
) |
$ |
— |
|
||
Accertify Gain on Sale (after tax) |
$ |
0.66 |
|
$ |
— |
|
|
$ |
0.66 |
|
$ |
— |
|
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Adjusted Diluted EPS Excluding the Impact of Accertify Gain |
$ |
3.49 |
|
$ |
2.89 |
21 |
% |
|
$ |
6.82 |
|
$ |
5.29 |
29 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240718950590/en/
Media Contacts:
Giovanna Falbo, Giovanna.Falbo@aexp.com, +1.212.640.0327
Melanie Backs, Melanie.L.Backs@aexp.com, +1.212.640.2164
Investors/Analysts Contacts:
Kartik Ramachandran, Kartik.Ramachandran@aexp.com, +1.212.640.5574
Kristy Ashmawy, Kristy.Ashmawy@aexp.com, +1.212.640.5574
Source: American Express Company
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