American Express's earnings rise 22 percent, exceeding forecasts.
American Express's earnings rise 22 percent, exceeding forecasts.
American Express said third-quarter earnings rose 22 percent from a year earlier, as the credit card giant benefited from a lower tax rate and increased spending on the company's credit cards.
the New YorkThe company based in China said it made a profit of $ 1.65 billion, or $ 1.88 per share, which is higher than $ 1.36 billion, or $ 1.51 per share, in the same period last year. The results exceeded the expectations of analysts, who were looking for an AmEx to earn $ 1.77 per share, according to FactSet.
"We obtained solid results this quarter driven by increased spending by card members, commission income and loans," said Stephen Squeri, president and CEO of the company. Squeri took over AmEx earlier this year, when then-CEO Kenneth Chenault retired.
The results came as American Express It faces a much more competitive outlook than just a couple of years ago. The Chase Sapphire reserve card by JPMorgan Chase became an important product in the premium credit card market, something that only belonged to American Express with its Platinum card.
In response, AmEx has been adding benefits to its cards, such as a $ 15 credit a month in Uber, or, with the recently renewed Gold Card, a credit of $ 10 per month in select restaurants. Meanwhile, AmEx has increased annual fees on its cards to compensate for the increase in profits, something that does not seem to alienate new or existing customers. The total number of cards in force grew by 7 percent over the previous year, despite the increases in rates.
American Express card users spent $ 294.7 billion on their cards worldwide last quarter, an increase of 8 percent over the previous year. In the United States, the company's largest market, user card spending increased 10 percent compared to the previous year. AmEx charges a fee to merchants for each time their cards are used.
AmEx has also been encouraging users to keep a balance on their cards, in addition to raising more interest income, especially as interest rates rise. The total loans held by AmEx users were $ 77.6 billion in the quarter, compared to $ 67.9 billion in the previous year. That helped contribute to a 20 percent increase in interest income this quarter.
But this movement towards loans carries the risk that some customers can not pay their debts. The company's net amortization rate, or the percentage of loans that AmEx considers unrecoverable, increased to 2.5 percent from 2.1 percent the previous year. That figure is still among the lowest in the industry, but now it has moved up or has remained stable for several quarters.
Despite the increase in delinquencies, American Express Finance Director Jeff Campbell said the defaults are "slightly better than we had previously expected."
Like other large companies, AmEx also benefited from a lower tax rate this quarter, due to the Republican tax law enacted late last year. The amount that the company intends to pay income. taxes It dropped 2 percent from the previous year, despite the fact that AmEx revenues and profits grew.
AmEx shares rose 0.5 percent to $ 103.40 in post-market operations.
.
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';
n.queue=[];t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)[0];
s.parentNode.insertBefore(t,s)}(window, document,'script',
'https://connect.facebook.net/en_US/fbevents.js');
fbq('init', '369524843414444');
fbq('track', 'PageView');
.
SOURCE LINK ERESVIRAL.COM https://www.beviral.online
Comentarios
Publicar un comentario