American Express (NYSE:AXP) is scheduled to announce its third quarter earnings on Wednesday, October 17, 2012.

Earnings season is important to investors because it shows how much profit is left in the company's hand after deducting costs from revenue. SEE: Can Earnings Guidance Accurately Predict The Future?

What to Expect: Analysts are expecting American to report earnings of $1.09 per share, up 5.8% from a year ago, when the company reported earnings of $1.03 per share.

This is an increase from $1.07 three months ago. Analysts are projecting earnings of $4.41 per share for the fiscal year.

American is expected to report revenue of $7.9 billion for the quarter, down by 3% from last year's figure of $8.15 billion. Revenue of $31.65 billion is expected for the fiscal year.

Company Performance: The two most recent quarters have shown an increase in revenue. It increased 3.9% to $8.52 billion in second quarter and 7.4% in the quarter before.

The P/E ratio for AXP is 13.6, below the industry average of 21.58. A low P/E ratio may indicate that the market expects relatively slower earnings growth. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: The P/E Ratio: A Good Market-Timing Indicator

The stock price has dipped over the past quarter just slightly to $58.47 from $58.64 on July 16, 2012. August 8, 2012 to August 10, 2012 marked one of American's worst periods, as the share price fell $2.06.

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Tickers in this Article: AXP

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