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Will Growth in Billed Business Aid AmEx (AXP) Q3 Earnings?

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American Express Co. (AXP - Free Report) third-quarter 2018 results are anticipated to witness an increase in worldwide billed business across its diverse customer segments and geographies. Billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements (non-proprietary billed business), corporate payments and certain insurance fees charged on proprietary cards.

Card billed business is categorized under the United States or outside the United States based on where the Card Member is domiciled.

U.S. proprietary consumer and international proprietary consumer billings growth are likely to remain strong. the company’s U.S Platinum franchise is anticipated to drive growth in billed business.

Global Network Services billed business is expected to grow at a slower rate over the year than the proprietary business owing to the impact of the evolving regulatory environment in Europe and Australia.

Within the billed business in the U.S.,  categories such as proprietary consumer and commercial billed business, travel and expenditure (T&E) and non-T&E billed business, and airline related billed business are anticipated to witness growth.

Outside the U.S. billed business is expected to witness growth in Japan, Asia and Australia, Latin America and Canada, Europe, the Middle East and Africa.  

In the first half of 2018, card billed business grew 1% year over year to $580.3 billion. Per the Zacks Consensus Estimate, card billed business revenue is expected to be $296 billion, up 8.8% year over year.

Another earnings driver, card member loans, is likely to grow in the third quarter, as the company continued to expand its lending relationship with existing and acquired new Card Members, including the acquisitions from Citibank and a portion of Hilton co-brand portfolio. Total loans increased by 14% in the first half of 2018 and the trend is expected to continue sin the third quarter. (Read more:Will Revenue Growth Aid American Express Q3 Earnings?)

American Express carries a Zacks Rank #2 (Buy). Other stock poised to beat earnings estimates in the third quarter because of their favorable Zacks rank and a positive Earnings ESP are Discover Financial Services (DFS - Free Report) , Synchrony Financial (SYF - Free Report) . While Visa Inc. (V - Free Report) also looks to beat earnings but will report its fiscal fourth quarter on Oct 24.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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