This story incorporates reporting from Business Insider, Benzinga.com, Benzinga.com and Business Insider.
American Express released its fourth-quarter financial results, aligning closely with market expectations. The company reported earnings per share (EPS) of $3.04, slightly surpassing the consensus estimate of $3.03. Total revenue for the quarter stood at $17.18 billion, matching analyst expectations. Notably, the company reached a new milestone in its billed business, reporting a total of $408.4 billion, reflecting an 8% year-over-year increase.
The financial services giant highlighted a successful year in 2024, marked by record revenues of $65.9 billion — an increase of 10% on a foreign exchange adjusted basis. Net income for the year reached a historic high of $10.1 billion, with earnings per share climbing 25% from the previous year to $14.01. This robust performance underscores American Express’s strong growth trajectory, as stated by Stephen Squeri, the company’s chairman and CEO.
Breaking down the revenue sources for American Express, U.S. Consumer Services generated $8.25 billion in Q4, marking a 12% year-over-year increase. Commercial Services followed with $4.12 billion, an 8% rise compared to the previous year. The international card services segment showed an 11% growth, bringing in $2.99 billion, while the global merchant and network services posted a slight decline of 2%, recording $1.89 billion in revenue.
In terms of cardholder activity, both annual Card Member spending and net card fee revenues hit record levels in 2024. The company also achieved a significant increment in customer base, with 13 million new card acquisitions throughout the year. This growth was complemented by a strategic expansion of its global network, adding millions of new merchant locations worldwide.
Reflecting a strong market position, American Express shares have appreciated more than 70% over the past year, trading at all-time highs. Currently priced at $324.46, the stock saw a moderate increase of 0.68% ahead of the earnings release. Analysts, such as RBC Capital’s Jon Arfstrom, have maintained a ‘Buy’ rating on the stock, indicating positive future prospects.
Looking ahead to 2025, American Express expects continued momentum, with projected earnings per share ranging from $15 to $15.50. The company anticipates revenue growth between 8% and 10%. Analysts align with these projections, predicting an average EPS of $15.28 for the full year.
To enhance shareholder value, the company plans a 17% increase in its dividend payouts, reflecting confidence in sustained financial strength. This move is in line with its strategy to return capital to shareholders while continuing to invest in long-term growth initiatives.
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