American Express share price slides as strong dollar weighs heavily on sales

 
Clara Guibourg
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American Express posted higher earnings than expected - but disappointed on revenue (Source: Getty)

The figures

American Express posted earnings that will put a smile on shareholders’ faces, but the financial services company’s sales fell short of forecasts.

Revenue fell even further than expected, down to $8.28bn, against expectations of $8.45bn for the quarter.

Earnings per share, however came in at $1.42, easily beating expectations of $1.33.

AmEx shares are down 15 per cent over the year, and after reporting its quarterly results the company’s share price slipped 1.5 per cent in after-hours trading.

Why it’s interesting

It’s a mixed report from AmEx, with the company’s earnings beating forecasts, but revenue falling short. Although profit is higher than expected, it’s still down against the same period last year.

A strong dollar has weighed on the company’s results, but according to chief executive Kenneth Chenault this has been weighed up by a “substantial” capital return to shareholders.

What they said

Chief executive Kenneth Chenault said:

We delivered solid underlying earnings performance this quarter. Disciplined expense control and a substantial return of capital to shareholders through share repurchases together with higher Card Member spending and loan volumes helped to mitigate the negative impact of a strong US dollar and the year‐ago benefits from Global Business Travel, which now operates as a joint venture.

In short

Currency struggles are causing trouble for AmEx, but the company claims capital returns are mitigating some of this.

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