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American Express (AXP) Q1 Earnings Surpass, Decline Y/Y
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American Express Co. (AXP - Free Report) reported first-quarter 2021 earnings of $1.74 per share, beating the Zacks Consensus Estimate by 3.6% on the back of lower expenses. However, the bottom line fell 12.1% year over year due to muted revenues.
Total revenues of $9.06 billion missed the Zacks Consensus Estimate by 1.9% and also declined 12.1% year over year. Revenues suffered declines in Card Member spending and loan volumes as well as a lower average discount rate from the prior-year level.
Meanwhile, total expenses of $6.7 billion decreased 7% year over year owing to lower customer engagement costs on the back of limited Card Member spending as well as a controlled usage of travel-related Card Member benefits.
Provision for credit losses resulted in a benefit of $675 million compared with provision expense of $2.6 billion in the year-ago quarter.
Return on equity of 22.6% declined 180 basis points year over year.
American Express Company Price, Consensus and EPS Surprise
American Express’ Global Consumer Services segment reported pre-tax income of $2.1 billion compared with $231 million in the year-ago period. Total revenues, net of interest expenses of $5.3 billion, decreased 11% year over year, reflecting a fall in Card Member spending and loan volumes.
Global Commercial Services posted pre-tax income of $665 million compared with $19 million in the year-ago quarter. Total revenues, net of interest expenses, were $2.7 billion, which in turn, decreased 14% year over year, mirroring a decline in Card Member spending.
Global Merchant and Network Services’ net income plunged 24.8% year over year to $414 million in the reported quarter. Total revenues, net of interest expenses, were down 13% year over year to $1.2 billion, mainly due to reduced Card Member spending and the average discount rate.
Strong Financial Position (as of Mar 30, 2021)
Cash and cash equivalents were $40 billion, up 3% year over year. Total long-term debt of $42 billion was down 21% year over year.
Some other stocks worth considering with the apt combination of elements to surpass estimates this reporting cycle are as follows:
EVO Payments, Inc. has an Earnings ESP of +16.67% and is presently Zacks #3 Ranked.
Intercorp Financial Services Inc. (IFS - Free Report) has an Earnings ESP of +6.77% and is presently Zacks #2 Ranked.
Oportun Financial Corporation (OPRT - Free Report) has an Earnings ESP of +60.00% and a Zacks Rank #2 (Buy), currently.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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American Express (AXP) Q1 Earnings Surpass, Decline Y/Y
American Express Co. (AXP - Free Report) reported first-quarter 2021 earnings of $1.74 per share, beating the Zacks Consensus Estimate by 3.6% on the back of lower expenses. However, the bottom line fell 12.1% year over year due to muted revenues.
Total revenues of $9.06 billion missed the Zacks Consensus Estimate by 1.9% and also declined 12.1% year over year. Revenues suffered declines in Card Member spending and loan volumes as well as a lower average discount rate from the prior-year level.
Meanwhile, total expenses of $6.7 billion decreased 7% year over year owing to lower customer engagement costs on the back of limited Card Member spending as well as a controlled usage of travel-related Card Member benefits.
Provision for credit losses resulted in a benefit of $675 million compared with provision expense of $2.6 billion in the year-ago quarter.
Return on equity of 22.6% declined 180 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
American Express’ Global Consumer Services segment reported pre-tax income of $2.1 billion compared with $231 million in the year-ago period. Total revenues, net of interest expenses of $5.3 billion, decreased 11% year over year, reflecting a fall in Card Member spending and loan volumes.
Global Commercial Services posted pre-tax income of $665 million compared with $19 million in the year-ago quarter. Total revenues, net of interest expenses, were $2.7 billion, which in turn, decreased 14% year over year, mirroring a decline in Card Member spending.
Global Merchant and Network Services’ net income plunged 24.8% year over year to $414 million in the reported quarter. Total revenues, net of interest expenses, were down 13% year over year to $1.2 billion, mainly due to reduced Card Member spending and the average discount rate.
Strong Financial Position (as of Mar 30, 2021)
Cash and cash equivalents were $40 billion, up 3% year over year. Total long-term debt of $42 billion was down 21% 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.
Stocks to Consider
Some other stocks worth considering with the apt combination of elements to surpass estimates this reporting cycle are as follows:
EVO Payments, Inc. has an Earnings ESP of +16.67% and is presently Zacks #3 Ranked.
Intercorp Financial Services Inc. (IFS - Free Report) has an Earnings ESP of +6.77% and is presently Zacks #2 Ranked.
Oportun Financial Corporation (OPRT - Free Report) has an Earnings ESP of +60.00% and a Zacks Rank #2 (Buy), currently.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
AccessZacks Top 10 Stocks for 2021 today >>