American Express earnings beat expectations on strong card fee revenues, shares rise


American Express reported fourth-quarter results that beat analyst expectations, sending the stock higher as card fee revenues grew more than expected.

The shares rose 2% in premarket trading Friday.

Here’s how the payments company’s results compared to what Wall Street analysts expected:

  • Earnings: $2.03 per share vs $2.01 per share forecast by Refinitiv
  • Revenue: $11.365 billion vs $11.36 billion expected
  • Net card fees: $1.08 billion vs StreetAccount estimate of $1.05 billion
  • Discount revenue: $6.83 billion vs $6.88 billion forecast

American Express said its stronger-than-forecast profit was driven in large part by a “well-balanced mix” in fee, spending and lending revenues.

“These results demonstrate the success of our strategy to generate sustainable, profitable growth across the enterprise over the long term,” CEO Stephen Squeri said in a statement. He also noted American Express added 11.5 million new proprietary cards in 2019, with nearly 70% of new card members opting for the company’s fee-based products. This helped to drive “card fee revenue growth of 17 percent.”

American Express also reported revenue from discount offers totaled $6.83 billion, roughly in line with estimates.

The company’s adjusted annual profit came in at $8.30 per share, representing a 12% jump from the previous year. American Express expects 2020 profits to range between $8.85 per share and $9.25 per share. Analysts polled by Refinitiv expected earnings guidance ranging between $8.49 per share and $9.67 per share. The company also sees revenues growing between 8% and 10%.

American Express shares have surged more than 31% over the past 12 months, beating the S&P 500 and Dow Jones Industrial Average in that time.

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That strong performance coincides with data showing consumer strength over the past year despite geopolitical tensions and worries about an economic slowdown. The latest data from the University of Michigan showed consumer sentiment remained near its highest level in years.

The stock also got a boost this year after China’s central bank accepted an application from an American Express unit to do business in the second-largest economy in the world.

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