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American Express' Second Quarter Earnings Report
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AXP
American Express Company (NYSE:AXP) announced its results for the second quarter on July 18, 2012. American Express is a global payments, network, and travel company that offers credit card products and travel-related services to consumers and businesses on an international scale.
Investors should care about a company's quarterly earnings because it shows the state of the business over the past 90 days and provides guidance for the following 90 days. SEE: How To Decode A Company's Earnings Reports
The Numbers: American Express announced EPS of $1.15 per share versus the $1.09 per share estimate. Net income for the second quarter was $1.34 billion. This is 0.6% higher than the year-ago quarter. Last quarter marked the third in a row of rising net income.
Management Quote: "Consumer, small business and corporate cardmember spending, along with the business volumes generated by our network of bank partners, remained healthy despite a very uneven economy," said Kenneth I. Chenault, chairman and chief executive officer. Overall cardmember spending rose seven percent, or nine percent adjusted for foreign currency translations. That's slower than the increases we've seen in the recent quarters, but it comes on top of a very strong performance a year ago, and continues to grow faster than most of our large issuer competitors. The cardmember loan portfolio grew four percent, and credit indicators, which were excellent at the start of the year, improved even further this quarter. Given the uncertain economic outlook, we remained vigilant in managing discretionary expenses but continued to make substantial investments in marketing initiatives and leverage our loyalty programs to connect millions of consumers and businesses around the world. This helped to continue strengthening our relationships with merchants and cardmembers at a time when mobile and digital technologies are opening up a range of new possibilities."
A Look Back: Net income has increased 12.7% year-over-year on average across the last five quarters. The biggest gain came in the second quarter of the last fiscal year, when income climbed 30.9% from the year-earlier quarter.
Looking Ahead: The outlook for the company's next-quarter results is favorable. The average estimate for the third quarter has reached $1.07, up from $1.06 seven days ago. When analyst increase earnings estimates investors can assume business has been stronger than first thought and is an encouraging sign for investors. Over the past three months, the average estimate for the fiscal year has climbed from $4.25 per to share to $4.34.
Investors should care about a company's quarterly earnings because it shows the state of the business over the past 90 days and provides guidance for the following 90 days. SEE: How To Decode A Company's Earnings Reports
The Numbers: American Express announced EPS of $1.15 per share versus the $1.09 per share estimate. Net income for the second quarter was $1.34 billion. This is 0.6% higher than the year-ago quarter. Last quarter marked the third in a row of rising net income.
Management Quote: "Consumer, small business and corporate cardmember spending, along with the business volumes generated by our network of bank partners, remained healthy despite a very uneven economy," said Kenneth I. Chenault, chairman and chief executive officer. Overall cardmember spending rose seven percent, or nine percent adjusted for foreign currency translations. That's slower than the increases we've seen in the recent quarters, but it comes on top of a very strong performance a year ago, and continues to grow faster than most of our large issuer competitors. The cardmember loan portfolio grew four percent, and credit indicators, which were excellent at the start of the year, improved even further this quarter. Given the uncertain economic outlook, we remained vigilant in managing discretionary expenses but continued to make substantial investments in marketing initiatives and leverage our loyalty programs to connect millions of consumers and businesses around the world. This helped to continue strengthening our relationships with merchants and cardmembers at a time when mobile and digital technologies are opening up a range of new possibilities."
A Look Back: Net income has increased 12.7% year-over-year on average across the last five quarters. The biggest gain came in the second quarter of the last fiscal year, when income climbed 30.9% from the year-earlier quarter.
Looking Ahead: The outlook for the company's next-quarter results is favorable. The average estimate for the third quarter has reached $1.07, up from $1.06 seven days ago. When analyst increase earnings estimates investors can assume business has been stronger than first thought and is an encouraging sign for investors. Over the past three months, the average estimate for the fiscal year has climbed from $4.25 per to share to $4.34.
by
Investopedia Staff
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