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American Express (AXP) Q1 Earnings Beat on Higher Revenues
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American Express Co. (AXP - Free Report) reported first-quarter 2021 earnings of $2.73 per share, which beat the Zacks Consensus Estimate by 12.3%. However, the bottom line decreased 0.4% year over year.
For the quarter under review, AXP’s total revenues net of interest expense increased 29% year over year to $11.7 billion on the back of higher Card Member spending. The top line beat the Zacks Consensus Estimate 0.4%.
The strong first-quarter 2022 results gained from a continued business momentum and a solid revenue stream. American Express also benefited from better volumes in the quarter under review. AXP added 3 million proprietary cards in the quarter. Travel and Entertainment spending increased 121% year over year on an FX-adjusted basis.
American Express Company Price, Consensus and EPS Surprise
American Express reaffirmed its earlier announced guidance of revenue growth of 18-20% and earnings per share in the band of $9.25-$9.65. The consensus mark for AXP’s earnings per share stands at $9.74.
Q1 Operational Performance
Thanks to higher spending, network volumes jumped 30% year over year to $350.3 billion for the first quarter.
Provision for credit losses amounted to a benefit of $33 million compared with the year-ago quarter’s provision benefit of $675 million.
Total expenses of $9.1 billion increased 34% year over year, primarily due to higher customer engagement costs, net gains on Amex Ventures equity investments in the prior year and higher compensation expenses in the current quarter.
Q1 Segmental Performances
The Global Consumer Services Group segment recorded a pretax income of $1.7 billion for the first quarter, which decreased 19% year over year. Total revenues net of interest expense increased 27% year over year to $6.9 billion, courtesy of a rise in Card Member spending.
The Global Commercial Services segment delivered a pretax income of $804 million, which increased 19.1% year over year despite a 24% rise in expenses. Total revenues net of interest expense were $3.5 billion, which climbed 31% year over year, attributable to higher Card Member spending.
The Global Merchant and Network Services segment reported a pretax net income of $687 million, which increased 78.4% year over year despite a 1% increase in costs. Total revenues net of interest expense increased 30% year over year to $1.4 billion, primarily driven by growing network volumes.
Corporate and Other posted first-quarter pretax loss of $514 million, higher than the prior-year pretax loss of $212 million due to net gains on Amex Ventures equity investments.
Balance Sheet (as of Mar 31, 2022)
American Express exited the first quarter with cash & cash equivalents of $28 billion, which increased sequentially from $22 billion. As of Mar 31, 2022, AXP’s long-term debt was $38 billion, down from $39 billion at the end of 2021.
Zacks Rank & Other Companies With Favorable Combination
Just like AXP — currently carrying a Zacks Rank #3 (Hold) — pulled off an earnings beat for the first quarter, here are some other companies from the Finance space worth considering, as these too have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for ProAssurance’s bottom line for the to-be-reported quarter indicates an improvement of 325% from the prior-year period’s reported figure. PRA has witnessed an upward estimate revision in the past 30 days. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Centerspace (CSR - Free Report) has an Earnings ESP of +2.51% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Centerspace’s earnings per share for the to-be-reported quarter is pegged at $1.06, implying an 11.6% improvement from the year-ago figure of 95 cents. CSR has witnessed an upward estimate revision in the past 60 days.
SouthState Corporation (SSB - Free Report) has an Earnings ESP of +1.97% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for SouthState’s bottom line for the to-be-reported quarter has improved 4.8% in the past 30 days. SSB’s earnings beat estimates in each of the last four quarters, the average being 24.74%.
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American Express (AXP) Q1 Earnings Beat on Higher Revenues
American Express Co. (AXP - Free Report) reported first-quarter 2021 earnings of $2.73 per share, which beat the Zacks Consensus Estimate by 12.3%. However, the bottom line decreased 0.4% year over year.
For the quarter under review, AXP’s total revenues net of interest expense increased 29% year over year to $11.7 billion on the back of higher Card Member spending. The top line beat the Zacks Consensus Estimate 0.4%.
The strong first-quarter 2022 results gained from a continued business momentum and a solid revenue stream. American Express also benefited from better volumes in the quarter under review. AXP added 3 million proprietary cards in the quarter. Travel and Entertainment spending increased 121% year over year on an FX-adjusted basis.
American Express Company Price, Consensus and EPS Surprise
American Express Company price-consensus-eps-surprise-chart | American Express Company Quote
Outlook
American Express reaffirmed its earlier announced guidance of revenue growth of 18-20% and earnings per share in the band of $9.25-$9.65. The consensus mark for AXP’s earnings per share stands at $9.74.
Q1 Operational Performance
Thanks to higher spending, network volumes jumped 30% year over year to $350.3 billion for the first quarter.
Provision for credit losses amounted to a benefit of $33 million compared with the year-ago quarter’s provision benefit of $675 million.
Total expenses of $9.1 billion increased 34% year over year, primarily due to higher customer engagement costs, net gains on Amex Ventures equity investments in the prior year and higher compensation expenses in the current quarter.
Q1 Segmental Performances
The Global Consumer Services Group segment recorded a pretax income of $1.7 billion for the first quarter, which decreased 19% year over year. Total revenues net of interest expense increased 27% year over year to $6.9 billion, courtesy of a rise in Card Member spending.
The Global Commercial Services segment delivered a pretax income of $804 million, which increased 19.1% year over year despite a 24% rise in expenses. Total revenues net of interest expense were $3.5 billion, which climbed 31% year over year, attributable to higher Card Member spending.
The Global Merchant and Network Services segment reported a pretax net income of $687 million, which increased 78.4% year over year despite a 1% increase in costs. Total revenues net of interest expense increased 30% year over year to $1.4 billion, primarily driven by growing network volumes.
Corporate and Other posted first-quarter pretax loss of $514 million, higher than the prior-year pretax loss of $212 million due to net gains on Amex Ventures equity investments.
Balance Sheet (as of Mar 31, 2022)
American Express exited the first quarter with cash & cash equivalents of $28 billion, which increased sequentially from $22 billion. As of Mar 31, 2022, AXP’s long-term debt was $38 billion, down from $39 billion at the end of 2021.
Zacks Rank & Other Companies With Favorable Combination
Just like AXP — currently carrying a Zacks Rank #3 (Hold) — pulled off an earnings beat for the first quarter, here are some other companies from the Finance space worth considering, as these too have the right combination of elements to beat on earnings this time around:
ProAssurance Corporation (PRA - Free Report) currently has an Earnings ESP of +27.54% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for ProAssurance’s bottom line for the to-be-reported quarter indicates an improvement of 325% from the prior-year period’s reported figure. PRA has witnessed an upward estimate revision in the past 30 days. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Centerspace (CSR - Free Report) has an Earnings ESP of +2.51% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Centerspace’s earnings per share for the to-be-reported quarter is pegged at $1.06, implying an 11.6% improvement from the year-ago figure of 95 cents. CSR has witnessed an upward estimate revision in the past 60 days.
SouthState Corporation (SSB - Free Report) has an Earnings ESP of +1.97% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for SouthState’s bottom line for the to-be-reported quarter has improved 4.8% in the past 30 days. SSB’s earnings beat estimates in each of the last four quarters, the average being 24.74%.