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 $0.70 Per Common Share
American Express Company (NYSE: AXP):
($ in millions, except per share
amounts, and where indicated)
Quarters Ended
December 31,
Percentage Inc/(Dec)
Years Ended
December 31,
Percentage
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-adjusted1
$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 Share2
$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.
1As used in this release, FX-adjusted information assumes a
constant exchange rate between the periods being compared for
purposes of currency translations into U.S. dollars (i.e., assumes
the foreign exchange rates used to determine results for current
period apply to the corresponding prior-year period against which
such results are being compared). FX-adjusted revenues is a
non-GAAP measure. The company believes the presentation of
information on an FX-adjusted basis is helpful to investors by
making it easier to compare the company’s performance in one period
to that of another period without the variability caused by
fluctuations in currency exchange rates.
2 Diluted earnings per common share (EPS) was reduced by the
impact of (i) earnings allocated to participating share awards of
$14 million and $12 million for the three months ended December 31,
2023 and 2022, respectively, and $64 million and $57 million for
the years ended December 31, 2023 and 2022, respectively, and (ii)
dividends on preferred shares of $15 million and $14 million for
the three months ended December 31, 2023 and 2022, respectively,
and $58 million and $57 million for the years ended December 31,
2023 and 2022, respectively.
As used in this release:
- Card Member spending (billed business) represents transaction
volumes, including cash advances, on payment products issued by
American Express.
- Customer engagement costs represent the aggregate of Card
Member rewards, business development, Card Member services, and
marketing expenses.
- Operating expenses represent salaries and employee benefits,
professional services, data processing and equipment, and other,
net. Operating expenses for our reportable segments reflect both
costs incurred directly within each segment, as well as allocated
service costs, which primarily reflect salaries and benefits
associated with our technology and customer servicing groups, and
overhead expenses.
- Reserve releases and reserve builds represent the portion of
the provisions for credit losses for the period related to
increasing or decreasing reserves for credit losses as a result of,
among other things, changes in volumes, macroeconomic outlook,
portfolio composition, and credit quality of portfolios. Reserve
releases represent the amount by which net write-offs exceed the
provisions for credit losses. Reserve builds represent the amount
by which the provisions for credit losses exceed net
write-offs.
About American Express
American Express is a globally integrated payments company,
providing customers with access to products, insights and
experiences that enrich lives and build business success. Learn
more at americanexpress.com and connect with us on
facebook.com/americanexpress, instagram.com/americanexpress,
linkedin.com/company/american-express, X.com/americanexpress, and
youtube.com/americanexpress.
Key links to products, services and corporate sustainability
information: personal cards, business cards and services, travel
services, gift cards, prepaid cards, merchant services, Accertify,
Business Blueprint, Resy, corporate card, business travel,
diversity and inclusion, corporate sustainability and
Environmental, Social, and Governance reports.
Source: American Express Company
Location: Global
This earnings release should be read in conjunction with the
company’s statistical tables for the fourth quarter 2023, available
on the American Express Investor Relations website at
http://ir.americanexpress.com and in a Form 8-K furnished
today with the Securities and Exchange Commission.
An investor conference call will be held at 8:30 a.m. (ET) today
to discuss fourth-quarter results. Live audio and presentation
slides for the investor conference call will be available to the
general public on the above-mentioned American Express Investor
Relations website. A replay of the conference call will be
available later today at the same website address.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This release includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
which are subject to risks and uncertainties. The forward-looking
statements, which address American Express Company’s current
expectations regarding business and financial performance,
including management’s outlook for 2024 and long-term growth
aspiration, among other matters, contain words such as “believe,”
“expect,” “anticipate,” “intend,” “plan,” “aim,” “will,” “may,”
“should,” “could,” “would,” “likely,” “continue” and similar
expressions. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
on which they are made. The company undertakes no obligation to
update or revise any forward-looking statements. Factors that could
cause actual results to differ materially from these
forward-looking statements, include, but are not limited to, the
following:
- the company’s ability to achieve its 2024 earnings per common
share (EPS) outlook and grow EPS in the future consistent with the
company’s growth aspiration, which will depend in part on revenue
growth, credit performance and the effective tax rate remaining
consistent with current expectations and the company’s ability to
continue investing at high levels in areas that can drive
sustainable growth (including its brand, value propositions,
customers, colleagues, marketing, technology and coverage),
controlling operating expenses, effectively managing risk and
executing its share repurchase program, any of which could be
impacted by, among other things, the factors identified in the
subsequent paragraphs as well as the following: macroeconomic
conditions, such as recession risks, changes in interest rates,
effects of inflation, labor shortages and strikes or higher rates
of unemployment, supply chain issues, energy costs and fiscal and
monetary policies; geopolitical instability, including the ongoing
Ukraine and Israel wars and tensions involving China and the U.S.;
the impact of any future contingencies, including, but not limited
to, legal costs and settlements, the imposition of fines or
monetary penalties, increases in Card Member remediation,
investment gains or losses, restructurings, impairments and changes
in reserves; issues impacting brand perceptions and the company’s
reputation; impacts related to new or renegotiated cobrand and
other partner agreements and joint ventures; and the impact of
regulation and litigation, which could affect the profitability of
the company’s business activities, limit the company’s ability to
pursue business opportunities, require changes to business
practices or alter the company’s relationships with Card Members,
partners and merchants;
- the company’s ability to achieve its 2024 revenue growth
outlook and grow revenues net of interest expense in the future
consistent with the company’s growth aspiration, which could be
impacted by, among other things, the factors identified above and
in the subsequent paragraphs, as well as the following: spending
volumes and the spending environment not being consistent with
expectations, including T&E spend growing slower than expected,
further slowing in spend by U.S. small and mid-sized enterprise or
U.S. large and global corporate customers, or a general slowdown or
increase in volatility in consumer and business spending volumes;
changes in foreign currency exchange rates; an inability to address
competitive pressures, innovate and expand the company’s products
and services, leverage the advantages of the company’s
differentiated business model, attract customers across generations
and age cohorts, including Millennial and Gen Z, and implement
strategies and business initiatives, including within the premium
consumer space, commercial payments and the global merchant
network; the effects of the end of the moratorium on student loan
repayments; the impact of the decommissioning of one of the
company’s alternative payment solutions; and merchant discount
rates changing by a greater or lesser amount than expected;
- net card fees not performing consistently with expectations,
which could be impacted by, among other things, a deterioration in
macroeconomic conditions impacting the ability and desire of Card
Members to pay card fees; higher Card Member attrition rates; the
pace of Card Member acquisition activity and demand for our
fee-based products; and the company’s inability to address
competitive pressures, develop attractive premium value
propositions and implement its strategy of refreshing card
products, enhancing benefits and services and continuing to
innovate with respect to its products;
- net interest income, the effects of changes in interest rates
and the growth of loans and Card Member receivables outstanding,
and the portion of which that is interest bearing, being higher or
lower than expectations, which could be impacted by, among other
things, the behavior and financial strength of Card Members and
their actual spending, borrowing and paydown patterns; the
company’s ability to effectively manage risk and enhance Card
Member value propositions; changes in benchmark interest rates,
including where such changes affect the company’s assets or
liabilities differently than expected; changes in capital and
credit market conditions and the availability and cost of capital;
credit actions, including line size and other adjustments to credit
availability; the yield on Card Member loans not remaining
consistent with current expectations; the company’s deposit levels
or the interest rates it offers on deposits changing from current
expectations; and the effectiveness of the company’s strategies to
capture a greater share of existing Card Members’ spending and
borrowings, and attract new, and retain existing, customers;
- future credit performance, the level of future delinquency,
reserve and write-off rates and the amount and timing of future
reserve builds and releases, which will depend in part on
macroeconomic factors such as unemployment rates, GDP and the
volume of bankruptcies; the ability and willingness of Card Members
to pay amounts owed to the company; changes in consumer behavior
that affect loan and receivable balances (such as paydown and
revolve rates); the credit profiles of new customers acquired; the
enrollment in, and effectiveness of, financial relief programs and
the performance of accounts as they exit from such programs;
collections capabilities and recoveries of previously written-off
loans and receivables; and governmental actions providing forms of
relief with respect to certain loans and fees, and the termination
of such actions;
- the actual amount to be spent on Card Member rewards and
services and business development, and the relationship of these
variable customer engagement costs to revenues, which could be
impacted by continued changes in macroeconomic conditions and Card
Member behavior as it relates to their spending patterns (including
the level of spend in bonus categories), the redemption of rewards
and offers (including travel redemptions) and usage of
travel-related benefits; the costs related to reward point
redemptions; further enhancements to product benefits to make them
attractive to Card Members and prospective customers, potentially
in a manner that is not cost effective; new and renegotiated
contractual obligations with business partners; and the pace and
cost of the expansion of the company’s global lounge
collection;
- the actual amount the company spends on marketing in 2024 and
beyond and the efficiency of its marketing spending, which will be
based in part on continued changes in the macroeconomic and
competitive environment and business performance; management’s
decisions regarding the timing of spending on marketing and the
effectiveness of management’s investment optimization process;
management’s identification and assessment of attractive investment
opportunities; management’s ability to develop attractive premium
value propositions and drive customer demand; the receptivity of
Card Members and prospective customers to advertising and customer
acquisition initiatives; and the company’s ability to realize
marketing efficiencies and balance expense control and investments
in the business;
- the company’s ability to control operating expenses, including
relative to future revenue growth, and the actual amount spent on
operating expenses in 2024 and beyond, which could be impacted by,
among other things, salary and benefit expenses to attract and
retain talent; a persistent inflationary environment; the company’s
ability to realize operational efficiencies, including through
automation; management’s decision to increase or decrease spending
in such areas as technology, business and product development,
sales force, premium servicing and digital capabilities depending
on overall business performance; the company’s ability to innovate
efficient channels of customer interactions and the willingness of
Card Members to self-service and address issues through digital
channels; restructuring activity; supply chain issues; fraud costs;
compliance expenses and consulting, legal and other professional
services fees, including as a result of litigation or internal and
regulatory reviews; regulatory assessments; the level of M&A
activity and related expenses, including the completion of the
company’s sale of Accertify; information or cyber security
incidents; the payment of fines, penalties, disgorgement,
restitution, non-income tax assessments and litigation-related
settlements; the performance of Amex Ventures and other of the
company’s investments; impairments of goodwill or other assets; and
the impact of changes in foreign currency exchange rates on costs,
such as due to the devaluation of foreign currencies;
- the company’s tax rate not remaining consistent with
expectations, which could be impacted by, among other things,
further changes in tax laws and regulation (or related legislative
or regulatory inaction), the company’s geographic mix of income,
unfavorable tax audits and other unanticipated tax items;
- changes affecting the company’s plans regarding the return of
capital to shareholders, including increasing the level of the
dividend, which will depend on factors such as the company’s
capital levels and regulatory capital ratios; changes in the stress
testing and capital planning process and new rulemakings and
guidance from the Federal Reserve and other banking regulators,
including changes to regulatory capital requirements, such as final
rules resulting from the Basel III rule proposal; results of
operations and financial condition; credit ratings and rating
agency considerations; required company approvals; and the economic
environment and market conditions in any given period;
- changes affecting the expected timing for closing the sale of
Accertify, the amount of the potential gain the company recognizes
upon the closing and the portion of such gain management determines
to reinvest, which will depend on regulatory and other approvals,
consultation requirements, the execution of ancillary agreements,
the cost and availability of financing for the purchaser to fund
the transaction and the potential loss of key customers, vendors
and other business partners and management’s decisions regarding
future operations, strategies and business initiatives;
- changes in the substantial and increasing worldwide competition
in the payments industry, including competitive pressure that may
materially impact the prices charged to merchants that accept
American Express cards, the desirability of the company’s premium
card products, competition for new and existing cobrand
relationships, competition with respect to new products, services
and technologies, competition from new and non-traditional
competitors and the success of marketing, promotion and rewards
programs;
- the company’s ability to grow its leadership in commercial
payments and capture future spending growth in this sector,
including with respect to small and mid-sized enterprise customers,
which will depend in part on competition, the willingness and
ability of companies to use credit and charge cards for procurement
and other business expenditures as well as use the company’s other
products and services for financing needs, perceived or actual
difficulties and costs related to setting up card-based B2B payment
platforms, the company’s ability to offer attractive value
propositions and new products to potential customers, the company’s
ability to enhance and expand its payment and lending solutions and
build out a multi-product digital ecosystem to integrate its broad
product set, which is dependent on the company’s continued
investment in capabilities, features, functionalities, platforms
and technologies;
- a failure in or breach of the company’s operational or security
systems, processes or infrastructure, or those of third parties,
including as a result of cyberattacks, which could compromise the
confidentiality, integrity, privacy and/or security of data,
disrupt the company’s operations, reduce the use and acceptance of
American Express cards and lead to regulatory scrutiny, litigation,
remediation and response costs, and reputational harm;
- legal and regulatory developments, which could affect the
profitability of the company’s business activities; limit the
company’s ability to pursue business opportunities or conduct
business in certain jurisdictions; require changes to business
practices or governance, or alter the company’s relationships with
Card Members, partners, merchants and other third parties,
including its ability to continue certain cobrand relationships in
the EU; exert further pressure on merchant discount rates and the
company’s GNS business; alter the competitive landscape; result in
increased costs related to regulatory oversight and compliance,
litigation-related settlements, judgments or expenses, restitution
to Card Members or the imposition of fines or monetary penalties;
materially affect capital or liquidity requirements, results of
operations or ability to pay dividends; or result in harm to the
American Express brand; and
- factors beyond the company’s control such as global economic
and business conditions, consumer and business spending generally,
unemployment rates, geopolitical conditions, including further
escalations of ongoing military conflicts, adverse developments
affecting third parties, including other financial institutions,
merchants or vendors, as well as severe weather conditions, natural
disasters, power loss, disruptions in telecommunications, health
pandemics, terrorism and other catastrophic events, any of which
could significantly affect demand for and spending on American
Express cards, delinquency rates, loan and receivable balances,
deposit levels and other aspects of the company’s business and
results of operations or disrupt its global network systems and
ability to process transactions.
A further description of these uncertainties and other risks can
be found in American Express Company’s Annual Report on Form 10-K
for the year ended December 31, 2022, Quarterly Reports on Form
10-Q for the quarters ended March 31, June 30 and September 30,
2023 and the company’s other reports filed with the Securities and
Exchange Commission.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240126549882/en/
Media: Giovanna Falbo, Giovanna.Falbo@aexp.com,
+1.212.640.0327 Andrew R. Johnson, Andrew.R.Johnson@aexp.com,
+1.212.640.8610
Investors/Analysts: Kartik Ramachandran,
Kartik.Ramachandran@aexp.com, +1.212.640.5574 Michelle A. Scianni,
Michelle.A.Scianni@aexp.com, +1.212.640.5574
American Express (NYSE:AXP)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
American Express (NYSE:AXP)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024