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