American Express Raises Full-Year Earnings Per Share Guidance
Q2 EPS Increased 44% to
Revenue Grew 8% (9% FX-Adjusted2) to Record
(Millions, except per share amounts, and where indicated) |
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Quarters Ended
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Six Months Ended
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2024 |
2023 |
2024 |
2023 |
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Billed Business (Billions) FX-adjusted 2 |
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5% 6% |
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6% 6% |
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Total Revenues Net of Interest Expense FX-adjusted 2 |
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8% 9% |
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10% 10% |
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Net Income |
|
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39% |
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37% |
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Diluted Earnings Per Common Share (EPS) 3 |
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44% |
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41% |
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Adjusted EPS Excluding Transaction Gain 1 |
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21% |
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29% |
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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
An investor conference call will be held at
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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.
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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
• 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
(Preliminary) |
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Appendix I |
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Reconciliation of Adjusted EPS Excluding Transaction Gain |
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Quarters Ended
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Six Months Ended
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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 |
|
$ |
— |
|
||
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 |
% |
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