Company Reaffirms Full-Year 2024 Revenue and
EPS Guidance
American Express Company (NYSE: AXP) today reported
first-quarter net income of $2.4 billion, or $3.33 per share,
compared with net income of $1.8 billion, or $2.40 per share, a
year ago.
(Millions, except per share
amounts, and where indicated)
Quarters Ended March
31,
Percentage Inc/(Dec)
2024
2023
Billed Business (Billions)
FX-adjusted1
$367.0
$345.5
$344.1
6%
7%
Total Revenues Net of Interest Expense
FX-adjusted1
$15,801
$14,281
$14,230
11%
11%
Net Income
$2,437
$1,816
34%
Diluted Earnings Per Common Share2
$3.33
$2.40
39%
Average Diluted Common Shares
Outstanding
722
744
(3)%
“We have started 2024 off strong, with our first-quarter results
reflecting the positive trends we have seen in our business the
last several years,” said Stephen J. Squeri, Chairman and Chief
Executive Officer. “Revenue increased 11 percent from a year
earlier to $15.8 billion and EPS increased 39 percent to $3.33.
“Our continued investments in our value propositions, marketing,
brand and technology capabilities have helped drive high levels of
engagement with our premium customers. Overall Card Member spending
grew 7 percent on an FX-adjusted basis, with spending by U.S.
consumer Card Members up 8 percent from a year earlier and spending
in our International Card Services segment increasing 13 percent on
an FX-adjusted basis.
“We continue to attract high-spending, high credit-quality
customers to the franchise, with new card acquisitions accelerating
sequentially to 3.4 million in the quarter. Our fee-based products
accounted for around 70 percent of the new account acquisitions we
saw in the quarter, and we continue to see strong demand from
Millennial and Gen Z consumers, who accounted for over 60 percent
of new consumer account acquisitions globally. Our credit metrics
remain best in class.
“Based on our results to date and the trends we are seeing in
our business, we continue to expect full-year 2024 revenue growth
of 9 percent to 11 percent and EPS of $12.65 to $13.15.”
First-quarter consolidated total revenues net of interest
expense were $15.8 billion, up 11 percent from $14.3 billion a year
ago. The increase was primarily driven by higher net interest
income and increased Card Member spending.
Consolidated provisions for credit losses were $1.3 billion,
compared with $1.1 billion a year ago. The increase reflected
higher net write-offs, partially offset by a lower net reserve
build of $148 million, compared with a net reserve build of $320
million a year ago.
Consolidated expenses were $11.4 billion, up 3 percent from
$11.1 billion a year ago. The increase primarily reflected higher
customer engagement costs, which were driven by higher Card Member
spending, increased usage of travel-related benefits and higher
marketing investments, partially offset by a $196 million benefit
resulting from enhancements to the models for estimating future
Membership Rewards redemptions.
The consolidated effective tax rate was 22.5 percent, up from
16.2 percent a year ago, primarily reflecting discrete tax benefits
in the prior year.
This earnings release should be read in conjunction with the
company’s statistical tables for the first 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 first-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.
1 As used in this release, FX-adjusted information assumes a
constant exchange rate between the periods being compared for
purposes of currency translations into U.S. dollars (i.e., assumes
the foreign exchange rates used to determine results for current
period apply to the corresponding prior-year period against which
such results are being compared). FX-adjusted revenues is a
non-GAAP measure. The company believes the presentation of
information on an FX-adjusted basis is helpful to investors by
making it easier to compare the company’s performance in one period
to that of another period without the variability caused by
fluctuations in currency exchange rates.
2 Diluted earnings per common share (EPS) was reduced by the
impact of (i) earnings allocated to participating share awards of
$18 million and $14 million for the three months ended March 31,
2024 and 2023, respectively, and (ii) dividends on preferred shares
of $14 million for both the three months ended March 31, 2024 and
2023.
As used in this release:
- Card Member spending (billed business) represents transaction
volumes, including cash advances, on payment products issued by
American Express.
- Customer engagement costs represent the aggregate of Card
Member rewards, business development, Card Member services, and
marketing expenses.
- 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.
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, Accertify,
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, the
following:
- the company’s ability to achieve its 2024 earnings per common
share (EPS) outlook and grow EPS in the future consistent with the
company’s growth aspiration, 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 as well as the following: macroeconomic
conditions, such as recession risks, changes in interest rates,
effects of inflation, labor shortages or higher rates of
unemployment, supply chain issues, energy costs and fiscal and
monetary policies; geopolitical instability, including the ongoing
Ukraine and Israel wars, broader regional hostilities and tensions
involving China and the U.S.; the impact of any future
contingencies, including, but not limited to, legal costs and
settlements, the imposition of fines or monetary penalties,
increases in Card Member remediation, investment gains or losses,
restructurings, impairments and changes in reserves; issues
impacting brand perceptions and the company’s reputation; impacts
related to new or renegotiated cobrand and other partner agreements
and joint ventures; and the impact of regulation and litigation,
which could affect the profitability of the company’s business
activities, limit the company’s ability to pursue business
opportunities, require changes to business practices or alter the
company’s relationships with Card Members, partners and
merchants;
- the company’s ability to achieve its 2024 revenue growth
outlook and grow revenues net of interest expense in the future
consistent with the company’s growth aspiration, which could be
impacted by, among other things, the factors identified above and
in the subsequent paragraphs, as well as the following: spending
volumes and the spending environment not being consistent with
expectations, including T&E spend growing slower than expected,
further slowing in spend by U.S. small and mid-sized enterprise or
U.S. large and global corporate customers, or a general slowdown or
increase in volatility in consumer and business spending volumes;
changes in foreign currency exchange rates; an inability to address
competitive pressures, innovate and expand the company’s products
and services, leverage the advantages of the company’s
differentiated business model, attract customers across generations
and age cohorts, including Millennial and Gen Z customers, and
implement strategies and business initiatives, including within the
premium consumer space, commercial payments and the global network;
the effects of regulatory initiatives on fees; and merchant
discount rates changing by a greater or lesser amount than
expected;
- net card fees not performing consistently with expectations,
which could be impacted by, among other things, a deterioration in
macroeconomic conditions impacting the ability and desire of Card
Members to pay card fees; higher Card Member attrition rates; the
pace of Card Member acquisition activity and demand for the
company’s fee-based products; and the company’s inability to
address competitive pressures, develop attractive premium value
propositions and implement its strategy of refreshing card
products, enhancing and delivering benefits and services and
continuing to innovate with respect to its products;
- net interest income, the effects of changes in interest rates
and the growth of loans and Card Member receivables outstanding,
and the portion of which that is interest bearing, being higher or
lower than expectations, which could be impacted by, among other
things, the behavior and financial strength of Card Members and
their actual spending, borrowing and paydown patterns; the
company’s ability to effectively manage underwriting risk and
enhance Card Member value propositions to continue to attract
premium Card Members; changes in benchmark interest rates,
including where such changes affect the company’s assets or
liabilities differently than expected; changes in capital and
credit market conditions and the availability and cost of capital;
credit actions, including line size and other adjustments to credit
availability; the yield on Card Member loans not remaining
consistent with current expectations; the company’s deposit levels
or the interest rates it offers on deposits changing from current
expectations; and the effectiveness of the company’s strategies to
capture a greater share of existing Card Members’ spending and
borrowings, and attract new, and retain existing, customers;
- future credit performance, the level of future delinquency,
reserve and write-off rates and the amount and timing of future
reserve builds and releases, which will depend in part on
macroeconomic factors such as unemployment rates, GDP and the
volume of bankruptcies; the ability and willingness of Card Members
to pay amounts owed to the company; changes in consumer behavior
that affect loan and receivable balances (such as paydown and
revolve rates); the credit profiles of new customers acquired; the
enrollment in, and effectiveness of, financial relief programs and
the performance of accounts as they exit from such programs; the
impact of the usage of debt settlement companies; collections
capabilities and recoveries of previously written-off loans and
receivables; and governmental actions providing forms of relief
with respect to certain loans and fees, and the termination of such
actions;
- the actual amount to be spent on Card Member rewards and
services and business development, and the relationship of these
variable customer engagement costs to revenues, which could be
impacted by continued changes in macroeconomic conditions and Card
Member behavior as it relates to their spending patterns (including
the level of spend in bonus categories), the redemption of rewards
and offers (including travel redemptions) and usage of
travel-related benefits; the costs related to reward point
redemptions; further enhancements to product benefits to make them
attractive to Card Members and prospective customers, potentially
in a manner that is not cost effective; new and renegotiated
contractual obligations with business partners; the company’s
ability to identify and negotiate partner-funded value for Card
Members; and the pace and cost of the expansion of the company’s
global lounge collection;
- the actual amount the company spends on marketing in 2024 and
beyond and the 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; 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;
- the company’s ability to control operating expenses, including
relative to future revenue growth, and the actual amount spent on
operating expenses in 2024 and beyond, which could be impacted by,
among other things, salary and benefit expenses to attract and
retain talent; a persistent inflationary environment; the company’s
ability to realize operational efficiencies, including through
automation; management’s decision to increase or decrease spending
in such areas as technology, business and product development,
sales force, premium servicing and digital capabilities; the
company’s ability to innovate efficient channels of customer
interactions and the willingness of Card Members to self-service
and address issues through digital channels; restructuring
activity; supply chain issues; fraud costs; compliance expenses and
consulting, legal and other professional services fees, including
as a result of litigation or internal and regulatory reviews;
regulatory assessments; the level of M&A activity and related
expenses, including related to the completion of the company’s sale
of Accertify; information or cybersecurity incidents; the payment
of fines, penalties, disgorgement, restitution, non-income tax
assessments and litigation-related settlements; the performance of
Amex Ventures and other of the company’s investments; impairments
of goodwill or other assets; and the impact of changes in foreign
currency exchange rates on costs, such as due to the devaluation of
foreign currencies;
- the company’s tax rate not remaining consistent with
expectations, which could be impacted by, among other things,
further changes in tax laws and regulation (or the expiration of
provisions of tax laws or regulations), the implementation of tax
guidelines by jurisdictions, the company’s geographic mix of
income, unfavorable tax audits and other unanticipated tax
items;
- changes affecting the company’s plans regarding the return of
capital to shareholders, which will depend on factors such as the
company’s capital levels and regulatory capital ratios; changes in
the stress testing and capital planning process and new rulemakings
and guidance from the Federal Reserve and other banking regulators,
including changes to regulatory capital requirements, such as final
rules resulting from the Basel III rule proposal; results of
operations and financial condition; credit ratings and rating
agency considerations; and the economic environment and market
conditions in any given period;
- changes affecting the expected timing for closing the sale of
Accertify, the amount of the potential gain the company recognizes
upon the closing and the portion of such gain management determines
to reinvest back into the business, which will depend on regulatory
and other approvals, consultation requirements, the execution of
ancillary agreements, the cost and availability of financing for
the purchaser to fund the transaction and the potential loss of key
customers, vendors and other business partners and management’s
decisions regarding future operations, strategies and business
initiatives;
- changes in the substantial and increasing worldwide competition
in the payments industry, including competitive pressure and
competitor settlements and mergers that may materially impact the
prices charged to merchants that accept American Express cards and
surcharging by merchants, the desirability of the company’s premium
card products, competition for new and existing cobrand
relationships, competition with respect to new products, services
and technologies, competition from new and non-traditional
competitors and the success of marketing, promotion and rewards
programs;
- the company’s ability to grow its leadership in commercial
payments and capture future spending growth in this sector,
including with respect to small and mid-sized enterprise customers,
which will depend in part on competition, the willingness and
ability of companies to use credit and charge cards for procurement
and other business expenditures as well as use the company’s other
products and services for financing needs, perceived or actual
difficulties and costs related to setting up B2B payment platforms,
the company’s ability to offer attractive value propositions and
new products to potential customers, the company’s ability to
enhance and expand its payment and lending solutions and build out
a multi-product digital ecosystem to integrate its broad product
set, which is dependent on the company’s continued investment in
capabilities, features, functionalities, platforms and
technologies;
- the company’s ability to successfully invest in and compete
with respect to technological developments and digital payment and
travel solutions, which will depend in part on the company’s
success in evolving its products and processes for the digital
environment, developing new features in the Amex app and enhancing
its digital channels, building partnerships and executing programs
with other companies, effectively utilizing artificial intelligence
and machine learning and increasing automation to address servicing
and other customer needs, and supporting the use of our products as
a means of payment through online and mobile channels, all of which
will be impacted by investment levels, new product innovation and
development and infrastructure to support new products, services,
benefits and partner integrations;
- a failure in or breach of the company’s operational or security
systems, processes or infrastructure, or those of third parties,
including as a result of cyberattacks, which could compromise the
confidentiality, integrity, privacy and/or security of data,
disrupt the company’s operations, reduce the use and acceptance of
American Express cards and lead to regulatory scrutiny, litigation,
remediation and response costs, and reputational harm;
- legal and regulatory developments, which could affect the
profitability of the company’s business activities; limit the
company’s ability to pursue business opportunities or conduct
business in certain jurisdictions; require changes to business
practices or governance, or alter the company’s relationships with
Card Members, partners, merchants and other third parties,
including its ability to continue certain cobrand relationships in
the EU; impact card fees and rewards programs; exert further
pressure on merchant discount rates and the company’s GNS business,
as well as result in an increase in surcharging or steering; alter
the competitive landscape; subject the company to heightened
regulatory scrutiny and result in increased costs related to
regulatory oversight and compliance, litigation-related
settlements, judgments or expenses, restitution to Card Members or
the imposition of fines or monetary penalties; materially affect
capital or liquidity requirements, results of operations or ability
to pay dividends; or result in harm to the American Express brand;
and
- factors beyond the company’s control such as global economic
and business conditions, consumer and business spending generally,
unemployment rates, geopolitical conditions, including further
escalations or widening of ongoing military conflicts and regional
hostilities, adverse developments affecting third parties,
including other financial institutions, merchants or vendors, as
well as severe weather conditions, natural disasters, power loss,
disruptions in telecommunications, health pandemics, terrorism and
other catastrophic events, any of which could significantly affect
demand for and spending on American Express cards, delinquency
rates, loan and receivable balances, deposit levels and other
aspects of the company’s business and results of operations or
disrupt its global network systems and ability to process
transactions.
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 and the company’s other
reports filed with the Securities and Exchange
Commission.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240419037246/en/
Media Contacts: Giovanna Falbo, Giovanna.Falbo@aexp.com,
+1.212.640.0327 Andrew R. Johnson, Andrew.R.Johnson@aexp.com,
+1.212.640.8610 Investors/Analysts Contacts: Kartik
Ramachandran, Kartik.Ramachandran@aexp.com, +1.212.640.5574
Michelle A. Scianni, Michelle.A.Scianni@aexp.com,
+1.212.640.5574
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