By American Express topped earnings expectations Friday amid a continued rebound in travel and strong spending trends among younger consumers.
The company reported net income of $2.1 billion, or $2.73 a share, compared with $2.2 billion, or $2.74 a share, in the year-prior quarter. The FactSet consensus was for $2.40 a share in earnings.
American Express
AXP,
-1.44%
saw $11.74 billion in total revenues net of interest expense, up from $9.06 billion in the year-earlier period, while analysts tracked by FactSet had been modeling $11.62 billion.
“This performance was enabled by our ongoing investments in areas critical to sustainable, long-term growth, including customer acquisition, engagement and retention,” Chief Executive Stephen Squeri said in a release.
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Card member spending was up 35% on a currency-neutral basis in the quarter, and volumes notched a monthly record in March. Additionally, Squeri noted in his statement that Amex added 3 million new proprietary cards during the first quarter while seeing “all-time highs” in acquisitions of U.S. Platinum and Gold cards for consumers, and Platinum cards for businesses.
“With travel activity continuing to pick up, we also had record monthly acquisitions for our Delta Cards in March,” he added.
Amex’s network volumes totaled $350.3 billion in the quarter, up from $269.3 billion in the same period of 2021. The company highlighted continued spending strength among younger customers: Spending by the millennial and Gen-Z cohorts on Amex cards was up 56% in the quarter on a currency-neutral basis.
The company also has been seeing an extension of the travel recovery, pinpointing that travel and entertainment spending was up 121% from year-earlier levels while adjusting for currency impacts. Spending on those categories “essentially reached pre-pandemic levels globally for the first time in March,” the company said in its release.
Amex reported that its consolidated provisions for credit losses led to a $33 million benefit in the quarter, compared with a $675 million benefit a year before. The company said the change “primarily reflected a significantly lower net reserve release in the current quarter” that was partly offset by lower net write-offs, as credit metrics are still “near historic lows.”
Amex continues to expect 18% to 20% revenue growth for the full year, along with earnings per share of $9.25 to $9.65.
Its shares have risen 17% over the past three months as the Dow Jones Industrial Average
DJIA,
-1.05%
has inched up 1.5%.
