American Express’ (AXP) first-quarter results increased on a yearly basis and topped market estimates, while the payments company reiterated its full-year outlook for earnings and revenue growth.
Per-share earnings came in at $3.33 for the three months through March 31, rising from $2.40 the year before and ahead of the consensus on Capital IQ for $2.96. Revenue, net of interest expense, climbed 11% to $15.8 billion, driven by higher net interest income and increased card member spending. The Street’s view was for $15.79 billion.
Shares of the company were up 3.4% in Friday trading.
US consumer services revenue advanced 14% to $7.5 billion while international card services increased 8% to $2.71 billion. Commercial services grew 8% to $3.79 billion, while global merchant and network services gained 7% to $1.87 billion.
“Bill business grew 7% versus last year in the first quarter on a (foreign-exchange)-adjusted basis, in line with the overall spend environment we have seen in the past few quarters,” Chief Financial Officer Christophe Le Caillec said during an earnings call, according to a Capital IQ transcript. “We saw 6% growth in goods and services spending and 8% growth in travel and entertainment spending.”
Provisions for credit losses totaled $1.27 billion, compared with $1.05 billion in the 2023 quarter. The increase reflected higher net write-offs, partially offset by a lower net reserve build of $148 million versus $320 million a year ago, according to the company. Consolidated expenses rose 3% to $11.39 billion due to higher customer engagement costs, which were driven by increased card member spending, among other factors.
American Express continues to anticipate earnings in a range of $12.65 to $13.15 per share for 2024 and revenue to grow between 9% and 11%. The Street is looking for GAAP EPS of $12.77 on revenue of $66.22 billion.
“While we do continue to see a softer spend environment, our spending volumes are tracking in line with our expectations to support our revenue guidance for the full year, and we are pleased with the continued strong engagement of our customers as the number of transactions from our card members continued to grow double digits this quarter,” according to Le Caillec.