American Express Surpasses Revenue Expectations

By Jaiveer Shekhawat and Arasu Kannagi Basil

(Reuters) – American Express on Friday beat Wall Street revenue expectations as more consumers used its cards during the holiday season for travel and online shopping.

A strong holiday season, set against a backdrop of declining interest rates, helped AmEx maintain high spending volumes.

Catering mostly to wealthy consumers, AmEx has better navigated economic uncertainty compared to others, as higher earners are less affected by inflation and high borrowing costs.

New York-based AmEx’s revenue rose 9% to $17.18 billion in the three months ending December 31, surpassing expectations of $17.16 billion, according to data compiled by LSEG.

Billed business, reflecting spending on AmEx cards, rose 8% to $408.4 billion in the fourth quarter.

Travel and entertainment expenditure was strongest, with CFO Christophe Le Caillec noting airline travel performed particularly well.

On an adjusted basis, AmEx earned $3.04 per share, meeting market expectations.

“We are encouraged by accelerating billings growth, which we believe will be key for American Express (NYSE:AXP) to achieve its goal of at least 10% revenue growth,” said William Blair analysts in a note.

Additionally, AmEx’s provisions for credit losses fell to $1.3 billion this quarter, down from $1.4 billion a year earlier.

A resilient economy and recent Federal Reserve rate cuts have reduced fears around credit quality.

Le Caillec stated, “The impact of rate changes to our economics are minimal, given our balance sheet and funding structure.”

AmEx anticipates 2025 earnings per share to be between $15 and $15.50, compared to analysts’ estimates of $15.23.

Moreover, the company forecasts 2025 revenue growth between 8% and 10%, aligned with Street expectations of 8.1%.