Analyst Misconception, Our Quarter Was ‘Good’

Finance


American Express (AXP) CEO Stephen Squeri defends the quarter after the card giant’s earnings fell short of analyst estimates.

“So $2.40 is a good number. $2.40 was above our plan,” Squeri told Yahoo Finance shortly after the results were released on Thursday, referring to first-quarter earnings per share. mentioned.

He added: “So, there’s nothing really unexpected in the quarter other than mark-to-market valuations, which was offset by one-off tax revenues.”

Squeri has a number of voices from earnings calls to back up his views.

AmEx posted first-quarter sales growth of 25% and 15% respectively in its US consumer services and commercial divisions. International sales increased 22%.

The credit card giant reiterated its annual sales growth forecast of 15% to 17%. Earnings are expected to be in the $11 to $11.40 range, which is also positive.

Analysts estimate $11.10 per share for the full year.

“The economy is definitely polarized and I think we’re going to see some stress in the lower tiers of the economy, but that’s not the case,” said Squerie, adding that he sees strong demand for travel this spring and summer.

Amex shares fell 1.5% in pre-market trading.

Earnings overview

  • Net sales: $14.3 billion, +22% y/y vs. $14.03 billion estimate

  • Bad debt allowance: $1.05 billion estimated at $890.2 million

  • Diluted EPS: Estimated $2.40, -12% YoY vs. $2.65

other things to notice

  • Acquired 3.4 million new cardholders.

  • March travel and entertainment category sales increased 39% (at constant currency).

  • 9% increase in global sales of goods and services (excluding currency fluctuations).

  • Return on equity (ROE) was 28.7%, down from 37.7% in the same period last year.

from the C-suite

“The interesting thing here is that there was a scenario where it was too big and it failed. [in 2008]Squeri told Yahoo Finance:

IMAGE DISTRIBUTED FOR AMERICAN EXPRESS - Amex Experiences will present a 2000s-inspired photo emporium for card members at the Coachella Valley Music & Arts Festival in Indio, CA on Friday, April 14, 2023. (Dan Steinberg/AP Images for American Express)

IMAGE DISTRIBUTED FOR AMERICAN EXPRESS – Amex Experiences will present a 2000s-inspired photo emporium for card members at the Coachella Valley Music & Arts Festival in Indio, CA on Friday, April 14, 2023. (Dan Steinberg/AP Images for American Express)

Brian Sotzi Editor-in-chief of Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and LinkedInAny tips on deals, mergers, activist situations, etc? Email brian.sozzi@yahoofinance.com

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