We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
American Express Company (AXP - Free Report) reported first-quarter 2024 earnings per share (EPS) of $3.33, which beat the Zacks Consensus Estimate by 12.1%. The bottom line climbed 38.8% year over year.
Total revenues net of interest expense amounted to $15.8 billion, which beat the Zacks Consensus Estimate by 0.3%. The top line improved 10.6% year over year in the quarter under review.
The strong-quarterly results benefited from improved net interest income and growth in the customer base of Millennials and Gen-Z, driving growth in the U.S. Consumer Services Billed business. The results were partially offset by escalating customer engagement and compensation expenses.
American Express Company Price, Consensus and EPS Surprise
Network volumes of $419 billion rose 5% year over year in the first quarter on the back of higher consumer spending. However, the figure lagged the Zacks Consensus Estimate of $420 billion. Total interest income of $5.8 billion increased 31% year over year and beat the consensus mark of $5.6 billion.
Provision for credit losses escalated 20% year over year to $1.3 billion due to a rise in net write-offs partially offset by a reduced net reserve build.
Total expenses increased 3% year over year to $11.4 billion due to an elevated customer engagement cost level, which resulted from expanding Card Member spending and higher usage of travel-related benefits.
Segmental Performances
The U.S. Consumer Services segment’s pre-tax income of $1.6 billion advanced 43% year over year in the first quarter and beat the Zacks Consensus Estimate of $1.3 billion. Total revenues net of interest expense climbed 14% year over year to $7.5 billion on the back of improved net interest income and higher Card Member spending.
The Commercial Services segment recorded a pre-tax income of $878 million in the quarter under review, which rose 39% year over year but missed the Zacks Consensus Estimate by 6.1%. Total revenues net of interest expense amounted to $3.8 billion, which grew 8% year over year on the back of an increase in net interest income. The reported figure beat the consensus mark of $3.7 billion.
The International Card Services segment reported a pre-tax income of $252 million in the first quarter, which rose 33% year over year. Total revenues net of interest expense improved 8% year over year to $2.7 billion, missing the consensus mark of $2.8 billion. The year-over-year growth was attributable to expanding Card Member spending and rising card fee revenues.
The Global Merchant and Network Services segment’s pre-tax net income of $1 billion advanced 15% year over year in the quarter under review and beat the Zacks Consensus Estimate of $958 million. Total revenues net of interest expense rose 7% year over year to $1.9 billion on the back of growth in merchant-related revenues.
Corporate and Other incurred a pre-tax loss of $615 million in the first quarter, narrower than the prior-year quarter’s loss of $667 million.
Balance Sheet (as of Mar 31, 2024)
American Express exited the first quarter with cash & cash equivalents of $54 billion, which climbed 32% year over year. Total assets of $269 billion grew 14% year over year.
Long-term debt amounted to $49 billion, which increased 20% year over year. Short-term borrowing came in at $2 billion.
Shareholders’ equity of $29 billion improved 12% year over year.
Return on average common equity improved 580 basis points year over year to 35.9%.
Capital Deployment Update
American Express bought back five million common shares in the first quarter of 2024. On Jan 26, 2024, management sanctioned a 17% hike in first-quarter 2024 dividend on common shares outstanding. The increased dividend amounted to 70 cents per share.
2024 Outlook Reiterated
AXP anticipates revenues to grow between 9% and 11% in 2024 from the 2023 level of $60.5 billion. Management estimates earnings per share in the range of $12.65-$13.15, the mid-point of which indicates an improvement of 15.1% from the 2023 level of $11.21.
Long-Term View
The company earlier expected revenue growth of more than 10% over the long term, while EPS is likely to continue registering mid-teens growth.
Zacks Rank and Key Picks
American Express currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Ryan Specialty’s 2024 full-year earnings indicates a 28.3% year-over-year increase. It beat earnings estimates in two of the past four quarters and met twice, with an average surprise of 5.1%. Also, the consensus mark for RYAN’s 2024 full-year revenues suggests 19.5% year-over-year growth.
The consensus mark for Root’s 2024 full-year earnings indicates a 23.1% year-over-year improvement. The earnings estimate has witnessed three upward estimate revisions in the past month against no movement in the opposite direction. Furthermore, the consensus estimate for ROOT’s 2024 full-year revenues suggests 101.8% year-over-year growth.
The Zacks Consensus Estimate for Brown & Brown’s 2024 full-year earnings is pegged at $3.55 per share, which indicates 26.3% year-over-year growth. The estimate jumped 14 cents over the past month. BRO beat earnings estimates in each of the past four quarters, with an average surprise of 11.2%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
AmEx (AXP) Beats Q1 Earnings Estimates, Reaffirms 2024 View
American Express Company (AXP - Free Report) reported first-quarter 2024 earnings per share (EPS) of $3.33, which beat the Zacks Consensus Estimate by 12.1%. The bottom line climbed 38.8% year over year.
Total revenues net of interest expense amounted to $15.8 billion, which beat the Zacks Consensus Estimate by 0.3%. The top line improved 10.6% year over year in the quarter under review.
The strong-quarterly results benefited from improved net interest income and growth in the customer base of Millennials and Gen-Z, driving growth in the U.S. Consumer Services Billed business. The results were partially offset by escalating customer engagement and compensation expenses.
American Express Company Price, Consensus and EPS Surprise
American Express Company price-consensus-eps-surprise-chart | American Express Company Quote
Q1 Operational Performance
Network volumes of $419 billion rose 5% year over year in the first quarter on the back of higher consumer spending. However, the figure lagged the Zacks Consensus Estimate of $420 billion. Total interest income of $5.8 billion increased 31% year over year and beat the consensus mark of $5.6 billion.
Provision for credit losses escalated 20% year over year to $1.3 billion due to a rise in net write-offs partially offset by a reduced net reserve build.
Total expenses increased 3% year over year to $11.4 billion due to an elevated customer engagement cost level, which resulted from expanding Card Member spending and higher usage of travel-related benefits.
Segmental Performances
The U.S. Consumer Services segment’s pre-tax income of $1.6 billion advanced 43% year over year in the first quarter and beat the Zacks Consensus Estimate of $1.3 billion. Total revenues net of interest expense climbed 14% year over year to $7.5 billion on the back of improved net interest income and higher Card Member spending.
The Commercial Services segment recorded a pre-tax income of $878 million in the quarter under review, which rose 39% year over year but missed the Zacks Consensus Estimate by 6.1%. Total revenues net of interest expense amounted to $3.8 billion, which grew 8% year over year on the back of an increase in net interest income. The reported figure beat the consensus mark of $3.7 billion.
The International Card Services segment reported a pre-tax income of $252 million in the first quarter, which rose 33% year over year. Total revenues net of interest expense improved 8% year over year to $2.7 billion, missing the consensus mark of $2.8 billion. The year-over-year growth was attributable to expanding Card Member spending and rising card fee revenues.
The Global Merchant and Network Services segment’s pre-tax net income of $1 billion advanced 15% year over year in the quarter under review and beat the Zacks Consensus Estimate of $958 million. Total revenues net of interest expense rose 7% year over year to $1.9 billion on the back of growth in merchant-related revenues.
Corporate and Other incurred a pre-tax loss of $615 million in the first quarter, narrower than the prior-year quarter’s loss of $667 million.
Balance Sheet (as of Mar 31, 2024)
American Express exited the first quarter with cash & cash equivalents of $54 billion, which climbed 32% year over year. Total assets of $269 billion grew 14% year over year.
Long-term debt amounted to $49 billion, which increased 20% year over year. Short-term borrowing came in at $2 billion.
Shareholders’ equity of $29 billion improved 12% year over year.
Return on average common equity improved 580 basis points year over year to 35.9%.
Capital Deployment Update
American Express bought back five million common shares in the first quarter of 2024. On Jan 26, 2024, management sanctioned a 17% hike in first-quarter 2024 dividend on common shares outstanding. The increased dividend amounted to 70 cents per share.
2024 Outlook Reiterated
AXP anticipates revenues to grow between 9% and 11% in 2024 from the 2023 level of $60.5 billion. Management estimates earnings per share in the range of $12.65-$13.15, the mid-point of which indicates an improvement of 15.1% from the 2023 level of $11.21.
Long-Term View
The company earlier expected revenue growth of more than 10% over the long term, while EPS is likely to continue registering mid-teens growth.
Zacks Rank and Key Picks
American Express currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Finance space are Ryan Specialty Holdings, Inc. (RYAN - Free Report) , Root, Inc. (ROOT - Free Report) and Brown & Brown, Inc. (BRO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Ryan Specialty’s 2024 full-year earnings indicates a 28.3% year-over-year increase. It beat earnings estimates in two of the past four quarters and met twice, with an average surprise of 5.1%. Also, the consensus mark for RYAN’s 2024 full-year revenues suggests 19.5% year-over-year growth.
The consensus mark for Root’s 2024 full-year earnings indicates a 23.1% year-over-year improvement. The earnings estimate has witnessed three upward estimate revisions in the past month against no movement in the opposite direction. Furthermore, the consensus estimate for ROOT’s 2024 full-year revenues suggests 101.8% year-over-year growth.
The Zacks Consensus Estimate for Brown & Brown’s 2024 full-year earnings is pegged at $3.55 per share, which indicates 26.3% year-over-year growth. The estimate jumped 14 cents over the past month. BRO beat earnings estimates in each of the past four quarters, with an average surprise of 11.2%.