We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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.
AXP Q1 Earnings Beat Estimates on Strong US Consumer Services Unit
Read MoreHide Full Article
Key Takeaways
AXP posted Q1 2026 EPS of $4.28, up 18% Y/Y, on revenues of $18.9B, up 11%.
AXP network volumes rose 11% to $486.3B and interest income climbed 9% to $6.7B.
AXP bought back 5M shares, raised dividend 16% to $0.95, and reaffirmed 2026 outlook.
American Express Company (AXP - Free Report) reported first-quarter 2026 earnings per share (EPS) of $4.28, which surpassed the Zacks Consensus Estimate by 6.2%. The bottom line advanced 18% year over year.
Total revenues, net of interest expense, improved 11% year over year to $18.9 billion. The top line beat the consensus mark by 1.6%.
The quarterly results were driven by increased Card Member spending, higher net interest income and improved card fee growth. However, the upside was partly offset by elevated operating expenses.
American Express Company Price, Consensus and EPS Surprise
Network volumes grew 11% year over year in the first quarter to $486.3 billion on the back of higher U.S. consumer spending. The metric outpaced the Zacks Consensus Estimate of $480 billion. Total interest income of $6.7 billion rose 9% year over year and beat the consensus mark of $6.6 billion. Provision for credit losses came in at $1.3 billion, which escalated 9% year over year in the quarter under review due to increased write-offs and a lower reserve release.
Total expenses increased 11% year over year to $13.9 billion due to higher variable customer engagement costs resulting from increased spending by Card Members, the refresh of the U.S. Platinum Card, greater use of travel and lifestyle benefits, and higher operating costs.
AXP’s Q1 Segmental Performances
The U.S. Consumer Services segment recorded pre-tax income of $1.8 billion, which inched up 1% year over year but marginally missed the Zacks Consensus Estimate. Total revenues, net of interest expenses, improved 11% year over year to $9.12 billion, higher than the consensus mark of $9.07 billion. An expanding Gen-Z and Millennials’ customer base favored this segment’s results.
The Commercial Services segment’s pre-tax income of $816 million dipped 2% year over year in the first quarter and fell short of the Zacks Consensus Estimate of $1 billion. Total revenues, net of interest expense, grew 7% year over year to $4.3 billion, higher than the consensus mark of $4.1 billion.
The International Card Services segment posted pre-tax income of $781 million, which doubled year over year and outpaced the Zacks Consensus Estimate of $350 million. Total revenues, net of interest expense, climbed 20% year over year to $3.5 billion, which beat the consensus mark of $3.4 billion.
The Global Merchant and Network Services segment’s pre-tax net income of $1.12 billion advanced 13% year over year in the quarter under review and beat the Zacks Consensus Estimate of $1.07 billion. Total revenues, net of interest expense, improved 10% year over year to $2 billion, higher than the consensus mark of $1.9 billion.
Corporate and Other incurred a pre-tax loss of $691 million in the first quarter, wider than the prior-year quarter’s loss of $609 million.
Balance Sheet (As of March 31, 2026)
American Express exited the first quarter with cash & cash equivalents of $53.8 billion, which rose 12.5% from the 2025-end level. Total assets of $308.9 billion increased 2.9% from the figure at the end of 2025.
Long-term debt amounted to $58.8 billion, up 4.2% from the figure as of Dec. 31, 2025. Short-term borrowing was $1.7 billion.
Shareholders’ equity of $34 billion inched up 1.6% from the 2025-end level. Return on average common equity improved 160 basis points year over year to 36.6% in the quarter under review.
Capital Deployment Update
American Express bought back 5 million common shares in the first quarter of 2026. In the quarter under review, management approved a 16% hike in its quarterly dividend. The increased dividend, amounting to 95 cents per share, will be paid out on May 8, 2026, to shareholders of record as of April 3, 2026.
AXP’s 2026 Outlook
American Express reiterated that 2026 revenues are expected to increase between 9% and 10% from the 2025 level. Management continues to estimate EPS in the range of $17.30-$17.90, the midpoint of which indicates an improvement of 14.4% from the 2025 figure.
Of the other Finance sector players that have reported first-quarter results so far, the bottom-line results of Morgan Stanley (MS - Free Report) , JPMorgan Chase & Co. (JPM - Free Report) and Truist Financial Corporation (TFC - Free Report) beat the Zacks Consensus Estimate.
Morgan Stanley reported first-quarter 2026 earnings were $3.43 per share, which outpaced the Zacks Consensus Estimate of $3.06. The bottom line jumped 32% from the prior-year quarter. Advisory revenues surged 74% year over year to $978 million. Equity underwriting revenues climbed 24% to $396 million, while fixed income underwriting revenues rose 10% to $742 million. Total investment banking revenues in the Institutional Securities division soared 36% to $2.12 billion. Equity revenues climbed 25% year over year to a record $5.15 billion, while fixed-income revenues jumped 29% to $3.36 billion.
Net income applicable to Morgan Stanley was $5.57 billion, rising 29% year over year. Quarterly net revenues were a record $20.58 billion, growing 16% from the prior-year quarter. The top line beat the consensus estimate of $19.85 billion. Total non-interest revenues were $17.88 billion, up 16% year over year, while NII was $2.70 billion, up 15%. Provision for credit losses was $98 million compared with $135 million in the prior-year quarter. In the Institutional Securities unit, pre-tax income was $4.16 billion, up 27% from the prior-year quarter. As of March 31, 2026, total assets under management or supervision were $1.87 trillion, up 13% year over year.
JPMorgan’s first-quarter 2026 earnings of $5.94 per share improved 17.2% from $5.07 in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $5.49 by 8.2%. Reported net revenues of $49.8 billion increased 10.0% year over year. The metric also topped the consensus mark of $48.6 billion. Net income climbed 13% year over year to $16.5 billion. In the Commercial & Investment Bank segment, Markets revenues rose 20% year over year to $11.6 billion. Fixed Income Markets revenues increased 21% to $7.1 billion. Equity Markets revenues grew 17% to $4.5 billion on increased client activity.
Investment banking improved meaningfully from the prior year, with IB fees up 28% to $2.88 billion. Firmwide net interest income increased 9% year over year to $25.37 billion on a reported basis, while managed NII was $25.48 billion. Average loans rose 11% year over year to $1.5 trillion, and average deposits increased 7% to $2.6 trillion. Provision for credit losses was $2.51 billion, with credit costs of $2.5 billion that included $2.3 billion of net charge-offs (NCOs) and a $191 million net reserve build. NCOs were essentially stable year over year, down by $16 million to $2.3 billion.
Truist Financial reported first-quarter 2026 earnings of $1.09 per share, which beat the Zacks Consensus Estimate of 99 cents by 10.1%. The bottom line was up 25.3% from 87 cents a year ago. Net income available to common shareholders was $1.38 billion, up 19% from the prior-year quarter. Total revenue of $5.15 billion rose 5.2% year over year. The top line beat the consensus estimate of $5.14 billion. Net interest income was $3.60 billion compared with $3.51 billion in the first quarter of 2025. The net interest margin rose 1 basis point to 3.02%. Non-interest income was $1.55 billion, up 11.6% from $1.39 billion a year ago.
Return on average common equity was 9.3% and return on average tangible common equity was 13.8% in the quarter, while the efficiency ratio improved to 57.9% from 59.3% in the prior-year period, signaling better operating leverage. Provision for credit losses increased to $479 million from $458 million a year ago. The NCO ratio of 0.61% of average loans and leases was broadly stable compared with the year-ago quarter. Total non-performing assets were $1.79 billion as of March 31, 2026, higher than $1.62 billion a year earlier.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
AXP Q1 Earnings Beat Estimates on Strong US Consumer Services Unit
Key Takeaways
American Express Company (AXP - Free Report) reported first-quarter 2026 earnings per share (EPS) of $4.28, which surpassed the Zacks Consensus Estimate by 6.2%. The bottom line advanced 18% year over year.
Total revenues, net of interest expense, improved 11% year over year to $18.9 billion. The top line beat the consensus mark by 1.6%.
The quarterly results were driven by increased Card Member spending, higher net interest income and improved card fee growth. However, the upside was partly offset by elevated operating expenses.
American Express Company Price, Consensus and EPS Surprise
American Express Company price-consensus-eps-surprise-chart | American Express Company Quote
AXP’s Q1 Operational Performance
Network volumes grew 11% year over year in the first quarter to $486.3 billion on the back of higher U.S. consumer spending. The metric outpaced the Zacks Consensus Estimate of $480 billion. Total interest income of $6.7 billion rose 9% year over year and beat the consensus mark of $6.6 billion. Provision for credit losses came in at $1.3 billion, which escalated 9% year over year in the quarter under review due to increased write-offs and a lower reserve release.
Total expenses increased 11% year over year to $13.9 billion due to higher variable customer engagement costs resulting from increased spending by Card Members, the refresh of the U.S. Platinum Card, greater use of travel and lifestyle benefits, and higher operating costs.
AXP’s Q1 Segmental Performances
The U.S. Consumer Services segment recorded pre-tax income of $1.8 billion, which inched up 1% year over year but marginally missed the Zacks Consensus Estimate. Total revenues, net of interest expenses, improved 11% year over year to $9.12 billion, higher than the consensus mark of $9.07 billion. An expanding Gen-Z and Millennials’ customer base favored this segment’s results.
The Commercial Services segment’s pre-tax income of $816 million dipped 2% year over year in the first quarter and fell short of the Zacks Consensus Estimate of $1 billion. Total revenues, net of interest expense, grew 7% year over year to $4.3 billion, higher than the consensus mark of $4.1 billion.
The International Card Services segment posted pre-tax income of $781 million, which doubled year over year and outpaced the Zacks Consensus Estimate of $350 million. Total revenues, net of interest expense, climbed 20% year over year to $3.5 billion, which beat the consensus mark of $3.4 billion.
The Global Merchant and Network Services segment’s pre-tax net income of $1.12 billion advanced 13% year over year in the quarter under review and beat the Zacks Consensus Estimate of $1.07 billion. Total revenues, net of interest expense, improved 10% year over year to $2 billion, higher than the consensus mark of $1.9 billion.
Corporate and Other incurred a pre-tax loss of $691 million in the first quarter, wider than the prior-year quarter’s loss of $609 million.
Balance Sheet (As of March 31, 2026)
American Express exited the first quarter with cash & cash equivalents of $53.8 billion, which rose 12.5% from the 2025-end level. Total assets of $308.9 billion increased 2.9% from the figure at the end of 2025.
Long-term debt amounted to $58.8 billion, up 4.2% from the figure as of Dec. 31, 2025. Short-term borrowing was $1.7 billion.
Shareholders’ equity of $34 billion inched up 1.6% from the 2025-end level. Return on average common equity improved 160 basis points year over year to 36.6% in the quarter under review.
Capital Deployment Update
American Express bought back 5 million common shares in the first quarter of 2026. In the quarter under review, management approved a 16% hike in its quarterly dividend. The increased dividend, amounting to 95 cents per share, will be paid out on May 8, 2026, to shareholders of record as of April 3, 2026.
AXP’s 2026 Outlook
American Express reiterated that 2026 revenues are expected to increase between 9% and 10% from the 2025 level. Management continues to estimate EPS in the range of $17.30-$17.90, the midpoint of which indicates an improvement of 14.4% from the 2025 figure.
AXP’s Zacks Rank
American Express currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Finance Sector Releases
Of the other Finance sector players that have reported first-quarter results so far, the bottom-line results of Morgan Stanley (MS - Free Report) , JPMorgan Chase & Co. (JPM - Free Report) and Truist Financial Corporation (TFC - Free Report) beat the Zacks Consensus Estimate.
Morgan Stanley reported first-quarter 2026 earnings were $3.43 per share, which outpaced the Zacks Consensus Estimate of $3.06. The bottom line jumped 32% from the prior-year quarter. Advisory revenues surged 74% year over year to $978 million. Equity underwriting revenues climbed 24% to $396 million, while fixed income underwriting revenues rose 10% to $742 million. Total investment banking revenues in the Institutional Securities division soared 36% to $2.12 billion. Equity revenues climbed 25% year over year to a record $5.15 billion, while fixed-income revenues jumped 29% to $3.36 billion.
Net income applicable to Morgan Stanley was $5.57 billion, rising 29% year over year. Quarterly net revenues were a record $20.58 billion, growing 16% from the prior-year quarter. The top line beat the consensus estimate of $19.85 billion. Total non-interest revenues were $17.88 billion, up 16% year over year, while NII was $2.70 billion, up 15%. Provision for credit losses was $98 million compared with $135 million in the prior-year quarter. In the Institutional Securities unit, pre-tax income was $4.16 billion, up 27% from the prior-year quarter. As of March 31, 2026, total assets under management or supervision were $1.87 trillion, up 13% year over year.
JPMorgan’s first-quarter 2026 earnings of $5.94 per share improved 17.2% from $5.07 in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $5.49 by 8.2%. Reported net revenues of $49.8 billion increased 10.0% year over year. The metric also topped the consensus mark of $48.6 billion. Net income climbed 13% year over year to $16.5 billion. In the Commercial & Investment Bank segment, Markets revenues rose 20% year over year to $11.6 billion. Fixed Income Markets revenues increased 21% to $7.1 billion. Equity Markets revenues grew 17% to $4.5 billion on increased client activity.
Investment banking improved meaningfully from the prior year, with IB fees up 28% to $2.88 billion. Firmwide net interest income increased 9% year over year to $25.37 billion on a reported basis, while managed NII was $25.48 billion. Average loans rose 11% year over year to $1.5 trillion, and average deposits increased 7% to $2.6 trillion. Provision for credit losses was $2.51 billion, with credit costs of $2.5 billion that included $2.3 billion of net charge-offs (NCOs) and a $191 million net reserve build. NCOs were essentially stable year over year, down by $16 million to $2.3 billion.
Truist Financial reported first-quarter 2026 earnings of $1.09 per share, which beat the Zacks Consensus Estimate of 99 cents by 10.1%. The bottom line was up 25.3% from 87 cents a year ago. Net income available to common shareholders was $1.38 billion, up 19% from the prior-year quarter. Total revenue of $5.15 billion rose 5.2% year over year. The top line beat the consensus estimate of $5.14 billion. Net interest income was $3.60 billion compared with $3.51 billion in the first quarter of 2025. The net interest margin rose 1 basis point to 3.02%. Non-interest income was $1.55 billion, up 11.6% from $1.39 billion a year ago.
Return on average common equity was 9.3% and return on average tangible common equity was 13.8% in the quarter, while the efficiency ratio improved to 57.9% from 59.3% in the prior-year period, signaling better operating leverage. Provision for credit losses increased to $479 million from $458 million a year ago. The NCO ratio of 0.61% of average loans and leases was broadly stable compared with the year-ago quarter. Total non-performing assets were $1.79 billion as of March 31, 2026, higher than $1.62 billion a year earlier.