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American Express (AXP) Q3 Earnings & Revenues Top Estimates
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American Express Co. (AXP - Free Report) reported third-quarter 2021 earnings of 2.27 per share, which beat the Zacks Consensus Estimate by 27.5%. Also, the bottom line increased 74.6% year over year.
The company’s results were driven by growing revenues and strong segmental performances, partly offset by escalating costs.
In the quarter under review, the company’s total revenues net of interest expense improved 24.9% year over year to $10.9 billion. The upside can be attributed to higher Card Member spending that reached record highs in the third quarter. The upside was also due to consumer and small business spending on goods and services and, increased travel and entertainment spending. The top line beat the Zacks Consensus Estimate by 3.6%.
Total expenses of $8.7 billion increased 29% year over year due to higher marketing and business development, card member rewards, card member services, salaries and employee benefits, professional services, and data processing and equipment.
Provision for credit losses amounted to a benefit of $191 million compared with the year-ago quarter’s provision expense of $665 million.
Return on equity of 32.6% expanded 1730 basis points year over year.
American Express Company Price, Consensus and EPS Surprise
Global Consumer Services Group segment recorded a pretax income of $1.5 billion in the third quarter, which increased 36.4% year over year. Total revenues net of interest expense increased 20.7% year over year to $6.4 billion, courtesy of a rise in Card Member spending.
Global Commercial Services segment delivered pretax income of $718 million, which more than doubled year over year. Total revenues net of interest expense was $3.2 billion, which climbed 28% year over year attributable to higher Card Member spending.
Global Merchant and Network Services segment reported pretax net income of $529 million, which increased 62.3% year over year. Total revenues net of interest expense increased 28% year over year to $1.3 billion, primarily driven by growing network volumes.
Corporate and Other posted third-quarter pretax loss of $285 million, which came in narrower than the prior-year quarter’s pretax loss of $359 million.
Strong Financial Position
American Express exited the third quarter with cash & cash equivalents of $28 billion, which plunged 22% year over year.
As of Sep 30, 2021, the company’s long-term debt was $34 billion, down 24% year over year.
Of the finance sector players that have reported third-quarter results so far, the bottom-line results of Synchrony Financial (SYF - Free Report) , Discover Financial Services (DFS - Free Report) and MarketAxess Holdings Inc. (MKTX - Free Report) beat the respective Zacks Consensus Estimate.
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American Express (AXP) Q3 Earnings & Revenues Top Estimates
American Express Co. (AXP - Free Report) reported third-quarter 2021 earnings of 2.27 per share, which beat the Zacks Consensus Estimate by 27.5%. Also, the bottom line increased 74.6% year over year.
The company’s results were driven by growing revenues and strong segmental performances, partly offset by escalating costs.
In the quarter under review, the company’s total revenues net of interest expense improved 24.9% year over year to $10.9 billion. The upside can be attributed to higher Card Member spending that reached record highs in the third quarter. The upside was also due to consumer and small business spending on goods and services and, increased travel and entertainment spending. The top line beat the Zacks Consensus Estimate by 3.6%.
Total expenses of $8.7 billion increased 29% year over year due to higher marketing and business development, card member rewards, card member services, salaries and employee benefits, professional services, and data processing and equipment.
Provision for credit losses amounted to a benefit of $191 million compared with the year-ago quarter’s provision expense of $665 million.
Return on equity of 32.6% expanded 1730 basis points year over year.
American Express Company Price, Consensus and EPS Surprise
American Express Company price-consensus-eps-surprise-chart | American Express Company Quote
Segmental Performances
Global Consumer Services Group segment recorded a pretax income of $1.5 billion in the third quarter, which increased 36.4% year over year. Total revenues net of interest expense increased 20.7% year over year to $6.4 billion, courtesy of a rise in Card Member spending.
Global Commercial Services segment delivered pretax income of $718 million, which more than doubled year over year. Total revenues net of interest expense was $3.2 billion, which climbed 28% year over year attributable to higher Card Member spending.
Global Merchant and Network Services segment reported pretax net income of $529 million, which increased 62.3% year over year. Total revenues net of interest expense increased 28% year over year to $1.3 billion, primarily driven by growing network volumes.
Corporate and Other posted third-quarter pretax loss of $285 million, which came in narrower than the prior-year quarter’s pretax loss of $359 million.
Strong Financial Position
American Express exited the third quarter with cash & cash equivalents of $28 billion, which plunged 22% year over year.
As of Sep 30, 2021, the company’s long-term debt was $34 billion, down 24% year over year.
Zacks Rank
American Express carries a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Finance Sector Releases
Of the finance sector players that have reported third-quarter results so far, the bottom-line results of Synchrony Financial (SYF - Free Report) , Discover Financial Services (DFS - Free Report) and MarketAxess Holdings Inc. (MKTX - Free Report) beat the respective Zacks Consensus Estimate.