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AmEx (AXP) Q3 Earnings & Revenues Beat, 2018 Guidance Up
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American Express Company (AXP - Free Report) reported third-quarter 2018 adjusted earnings per share of $1.88, beating the Zacks Consensus Estimate by 5.6%. Moreover, the bottom line witnessed a 25.3% year-over-year improvement.
Better-than-expected results were mainly backed by higher card member spending, loans and fee income.
Delving Deeper
Revenues came in at $10.1 billion, beating the Zacks Consensus Estimate by 1.1%. The top line increased 9% year over year, driven by higher loan volumes and an increase in Card Member spending and fees.
Provisions for loss totaled $817 million, up 6% year over year, which is attributable to growth in loan and an increase in higher write-offs, partly offset by stable delinquency rates.
Total expenses of $7.2 billion increased 8% year over year due to higher rewards expense and other customer engagement costs. The effective tax rate declined to 22% from 26% in the year-ago quarter, courtesy of the Tax Act.
American Express Company Price, Consensus and EPS Surprise
American Express’ Global Consumer Services segment reported net income of $779 million, up 15% year over year. Total revenues, net of interest expense of $5.4 billion, were up 11% year over year, reflecting higher loans and Card Member spending as well as fee income.
Global Commercial Services’ net income of $606 million was up 20% year over year. Total revenues, net of interest expenses, increased 9% year over year to $3.2 billion, primarily reflecting higher Card Member spending.
Global Merchant and Network Services’ net income rose 30% year over year to $580 million in the reported quarter. Total revenues, net of interest expenses, inched up 2% year over year to $1.6 billion on higher Card Member spending, partially offset by an expected decrease in the average discount rate and lower revenues from network partners.
Corporate and Other reported net loss of $311 million, wider than $246 million loss incurred in the year-ago quarter.
2018 Guidance Update
On the back of strong results in the first nine months of 2018, the company pulled up its earnings guidance. It now expects full-year 2018 revenues to be up 9% to 10% compared with earlier guidance of at least 9%.
Adjusted EPS is expected in the range of $7.30 to $7.40, up from the $6.90 to $7.30 range, that was set at the start of the year.
Zacks Rank
American Express carries a Zacks Rank #2 (Buy).
Upcoming Releases
Here are some companies poised to beat on earnings this quarter owing to a strong Zacks Rank as well as a positive Earnings ESP.
WEX Inc. (WEX - Free Report) is expected to report third-quarter earnings on Oct 31. This Zacks #2 Ranked stock has an Earnings ESP of +0.49%.
EVO Payments, Inc. is expected to report third-quarter earnings on Nov 7. This Zacks #3 (Hold) Ranked stock has an Earnings ESP of +2.91%.
Cardtronics PLC is expected to report third-quarter earnings on Nov 1. This Zacks #1 (Strong Buy) Ranked stock has an Earnings ESP of +3.2%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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AmEx (AXP) Q3 Earnings & Revenues Beat, 2018 Guidance Up
American Express Company (AXP - Free Report) reported third-quarter 2018 adjusted earnings per share of $1.88, beating the Zacks Consensus Estimate by 5.6%. Moreover, the bottom line witnessed a 25.3% year-over-year improvement.
Better-than-expected results were mainly backed by higher card member spending, loans and fee income.
Delving Deeper
Revenues came in at $10.1 billion, beating the Zacks Consensus Estimate by 1.1%. The top line increased 9% year over year, driven by higher loan volumes and an increase in Card Member spending and fees.
Provisions for loss totaled $817 million, up 6% year over year, which is attributable to growth in loan and an increase in higher write-offs, partly offset by stable delinquency rates.
Total expenses of $7.2 billion increased 8% year over year due to higher rewards expense and other customer engagement costs. The effective tax rate declined to 22% from 26% in the year-ago quarter, courtesy of the Tax Act.
American Express Company Price, Consensus and EPS Surprise
American Express Company Price, Consensus and EPS Surprise | American Express Company Quote
Strong Segment Results
American Express’ Global Consumer Services segment reported net income of $779 million, up 15% year over year. Total revenues, net of interest expense of $5.4 billion, were up 11% year over year, reflecting higher loans and Card Member spending as well as fee income.
Global Commercial Services’ net income of $606 million was up 20% year over year. Total revenues, net of interest expenses, increased 9% year over year to $3.2 billion, primarily reflecting higher Card Member spending.
Global Merchant and Network Services’ net income rose 30% year over year to $580 million in the reported quarter. Total revenues, net of interest expenses, inched up 2% year over year to $1.6 billion on higher Card Member spending, partially offset by an expected decrease in the average discount rate and lower revenues from network partners.
Corporate and Other reported net loss of $311 million, wider than $246 million loss incurred in the year-ago quarter.
2018 Guidance Update
On the back of strong results in the first nine months of 2018, the company pulled up its earnings guidance. It now expects full-year 2018 revenues to be up 9% to 10% compared with earlier guidance of at least 9%.
Adjusted EPS is expected in the range of $7.30 to $7.40, up from the $6.90 to $7.30 range, that was set at the start of the year.
Zacks Rank
American Express carries a Zacks Rank #2 (Buy).
Upcoming Releases
Here are some companies poised to beat on earnings this quarter owing to a strong Zacks Rank as well as a positive Earnings ESP.
WEX Inc. (WEX - Free Report) is expected to report third-quarter earnings on Oct 31. This Zacks #2 Ranked stock has an Earnings ESP of +0.49%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
EVO Payments, Inc. is expected to report third-quarter earnings on Nov 7. This Zacks #3 (Hold) Ranked stock has an Earnings ESP of +2.91%.
Cardtronics PLC is expected to report third-quarter earnings on Nov 1. This Zacks #1 (Strong Buy) Ranked stock has an Earnings ESP of +3.2%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>