American Express $AXP reported second-quarter earnings that beat analyst expectations on Friday, and raised its full-year revenue growth guidance to 10%, citing stronger-than-expected performance in the first half of the year.
The card company posted second-quarter earnings of $4.53 per share, up 11% from a year ago, as card member spending rose 9%
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American Express $AXP reported second-quarter earnings that beat analyst expectations on Friday, and raised its full-year revenue growth guidance to 10%, citing stronger-than-expected performance in the first half of the year.
Earnings per share reached $4.53 in the second quarter, an 11% increase compared with $4.08 in the same period last year. The result topped the $4.40 per share consensus estimate, according to Reuters. The company's full-year earnings per share guidance remains unchanged at $17.30 to $17.90, the company said.
Total revenues net of interest expense climbed 10% to $19.6 billion. Billed business — the company's measure of overall card volume — increased 9% to $455.8 billion.
"Six months into the year, we're seeing stronger momentum than we expected. The investments we made in our value propositions have driven accelerated spend and revenue growth," chairman and chief executive officer Stephen Squeri said in a statement.
American Express's consolidated provisions for credit losses totaled $1.1 billion in the quarter, compared with $1.4 billion in the year-earlier period. The decrease reflected a reserve release during the quarter compared to a reserve build in the prior year, the company said. The net write-off rate held at 2.0%, flat year-over-year.
Consolidated expenses rose 12% to $14.5 billion, driven by higher variable customer engagement costs from increased card member spending, the U.S. Platinum Card refresh, and greater use of card member benefits, as well as higher operating expenses, the company said.
American Express stock was down 1.4% in premarket trading on Friday.
The company said it plans to reinvest its first-half outperformance in growth initiatives. Squeri pointed to the Platinum card portfolio as the fastest-growing in the U.S. consumer business, and noted the company continued to attract new customers, with Millennials and Gen-Z cardholders representing the largest share of new additions.
Among other developments disclosed Friday, American Express announced a proposed acquisition of TheFork, a European restaurant booking platform operating across 11 countries with 50,000 restaurants. The company said closing the deal remains subject to regulatory approvals and completion of a labor consultation process.
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