American Express Announces Record Full-Year 2023 Revenue of $60.5 Billion, Up 14% on a Reported Basis and 15% on an FX-Adjusted Basis
Full-Year Earnings Per Share Increased 14% to $11.21
Full-Year 2024 Guidance for Revenue Growth of 9% to 11% and EPS of $12.65 to $13.15
Company Plans to Increase Quarterly Dividend by 17% to $0.70 Per Common Share
NEW YORK--(BUSINESS WIRE)--January 26, 2024--
American Express Company (NYSE: AXP):
($ in millions, except per share amounts, and where indicated)
Quarters Ended Percentage Years Ended Percentage
December 31, Inc/(Dec) December 31, Inc/(Dec)
---------------- ---------- ------------------ -----------
2023 2022 2023 2022
--------------- ------- ------- ---------- -------- -------- -----------
Billed Business
(Billions) $379.8 $357.4 6% $1,459.6 $1,338.3 9%
--------------- ------- ------- ---------- -------- -------- -----------
Total Revenues
Net of
Interest
Expense $15,799 $14,176 11% $60,515 $52,862 14%
FX-adjusted(1) $14,225 11% $52,833 15%
--------------- ------- ------- ---------- -------- -------- -----------
Total
Provisions for
Credit Losses $1,437 $1,027 40% $4,923 $2,182 #
--------------- ------- ------- ---------- -------- -------- -----------
Net Income $1,933 $1,572 23% $8,374 $7,514 11%
--------------- ------- ------- ---------- -------- -------- -----------
Diluted
Earnings Per
Common
Share(2) $2.62 $2.07 27% $11.21 $9.85 14%
--------------- ------- ------- ---------- -------- -------- -----------
Average Diluted
Common Shares
Outstanding 726 746 (3)% 736 752 (2)%
--------------- ------- ------- ---------- -------- -------- -----------
# - Denotes a variance
of 100 percent or
more.
American Express Company (NYSE: AXP) today reported full-year net income of $8.4 billion, or $11.21 per share, compared with net income of $7.5 billion, or $9.85 per share, a year ago.
“We delivered record revenues and profits in 2023, building on the momentum we’ve achieved since we announced our growth plan in January 2022,” said Stephen J. Squeri, Chairman and Chief Executive Officer. “We continued to drive strong customer engagement, and demand for our premium products remained robust. We added 12.2 million new proprietary cards in the year, bringing the total number of cards-in-force issued on our global network to over 140 million.
“Looking back over the two years since we announced our growth plan, I’m pleased to say that we have achieved what we set out to do, and we are ahead of where we thought we’d be on our journey. Since January 2022, we’ve grown revenues by more than 40 percent, from $42 billion to $61 billion, and Card Member spending has increased by 37 percent on an FX-adjusted basis to $1.5 trillion, an all-time high. These strong results demonstrate the strength of our premium customer base and the tremendous earnings power of our business model. The growth that we’ve been generating has enabled us to continue making investments to drive revenues and significantly expand the scale of our business, while effectively managing our expenses.
“Based on the momentum in our business, we are providing full-year 2024 guidance for revenue growth of 9 percent to 11 percent and EPS of $12.65 to $13.15. Looking ahead, we continue to run the business with a focus on our aspiration of revenue growth of 10 percent plus and mid-teens EPS growth.”
Consolidated total revenues net of interest expense for the full year were $60.5 billion, up 14 percent (15 percent FX-adjusted) from $52.9 billion a year ago. The increase was driven by higher net interest income and increased Card Member spending.
Credit metrics remained strong during the year, with net write-off and delinquency rates for total Card Member loans and receivables below pre-pandemic levels. Consolidated provisions for credit losses for the full year were $4.9 billion, compared with $2.2 billion a year ago. The increase reflected higher net write-offs and a net reserve build of $1.4 billion, compared with a reserve build of $617 million a year ago.
Consolidated expenses for the full year were $45.1 billion, up 10 percent from $41.1 billion a year ago. The increase primarily reflected higher customer engagement costs, which were driven by higher Card Member spending and increased usage of travel-related benefits, partially offset by lower marketing expenses. Operating expenses also increased, primarily driven by increased compensation costs.
The consolidated effective tax rate for the full year was 20.3 percent, down from 21.6 percent a year ago, primarily reflecting changes in the geographic mix of income.
Planned Dividend Increase
The company plans to increase the regular quarterly dividend on its common shares outstanding by 17 percent, from $0.60 to $0.70 per share, beginning with the first quarter 2024 dividend declaration.
Fourth-Quarter 2023 Results
For the fourth quarter of 2023, the company reported net income of $1.9 billion, or $2.62 per share, compared with net income of $1.6 billion, or $2.07 per share, a year ago.
Fourth-quarter consolidated total revenues net of interest expense were $15.8 billion, up 11 percent from $14.2 billion a year ago. The increase was primarily driven by higher net interest income and increased Card Member spending.
Consolidated provisions for credit losses were $1.4 billion, compared with $1 billion a year ago. The increase reflected higher net write-offs, partially offset by a lower net reserve build of $400 million, compared with a reserve build of $492 million a year ago.
Consolidated expenses were $11.9 billion, up 5 percent from $11.3 billion a year ago. The increase primarily reflected higher customer engagement costs, which were driven by higher Card Member spending and increased usage of travel-related benefits, partially offset by lower marketing expenses. Operating expenses also increased, driven in part by the impact of the devaluation of the Argentine peso and increased compensation costs; the prior year included higher net losses on Amex Ventures investments.
The consolidated effective tax rate was 23.0 percent, up from 16.0 percent a year ago, primarily reflecting discrete tax benefits in the prior year.
U.S. Consumer Services reported fourth-quarter pretax income of $1.5 billion, compared with $1.3 billion a year ago.
Total revenues net of interest expense were $7.4 billion, up 13 percent from $6.5 billion a year ago. The increase was primarily driven by higher net interest income and increased Card Member spending.
Provisions for credit losses were $860 million, compared with $542 million a year ago. The increase reflected higher net write-offs and a higher reserve build of $289 million, compared with a reserve build of $269 million a year ago.
Total expenses were $5.1 billion, up 8 percent from $4.7 billion a year ago, primarily reflecting higher customer engagement costs, which were driven by higher Card Member spending and increased usage of travel-related benefits, partially offset by lower marketing expenses.
Commercial Services reported fourth-quarter pretax income of $666 million, compared with $547 million a year ago.
Total revenues net of interest expense were $3.8 billion, up 7 percent from $3.6 billion a year ago. The increase was primarily driven by higher net interest income.
Provisions for credit losses were $368 million, compared with $271 million a year ago. The increase reflected higher net write-offs, partially offset by a lower net reserve build of $98 million, compared with a reserve build of $135 million a year ago.
Total expenses were $2.8 billion, up 1 percent compared to a year ago, reflecting higher operating expenses, primarily driven by higher service costs.
International Card Services reported fourth-quarter pretax income of $144 million, compared with a pretax loss of $15 million a year ago.
Total revenues net of interest expense were $2.7 billion, up 12 percent (9 percent FX-adjusted) from $2.4 billion a year ago. The increase was primarily driven by increased Card Member spending and higher card fee revenue.
Provisions for credit losses were $194 million, compared with $210 million a year ago. The decrease reflected a lower net reserve build of $14 million in the current quarter, compared with a reserve build of $87 million a year ago, partially offset by higher net write-offs.
Total expenses were $2.4 billion, up 6 percent from $2.2 billion a year ago, primarily reflecting higher customer engagement costs, driven by higher Card Member spending and increased usage of travel-related benefits.
Global Merchant and Network Services reported fourth-quarter pretax income of $822 million, compared with $691 million a year ago.
Total revenues net of interest expense were $1.9 billion, up 10 percent from $1.8 billion a year ago, primarily reflecting higher merchant-related revenues.
Total expenses were $1.1 billion, up 4 percent compared to a year ago, primarily reflecting a reserve build associated with a merchant exposure for Card Member purchases.
Corporate and Other reported a fourth-quarter pretax loss of $589 million, compared with a pretax loss of $638 million a year ago.