American Express reported fourth-quarter revenue that narrowly missed analysts' expectations on Thursday and a profit after reporting a loss in the same period a year ago.
"This was the sixth consecutive quarter of revenue growth of at least eight percent, driven once again by higher spending on cardmembers, lending and card fees." Stephen J. Squeri, Chairman and Chief Executive Officer of American Express, said in a press release.
The financial services company posted record sales in the third quarter of 2018, supported by higher spending by consumers and small businesses. Nomura and other companies had observed something known as "provisions" for losses, expenses for unrecognized customer loans and loan payments. These costs have dropped in recent quarters, Carache said.
In the fourth quarter, provisions for losses increased 14 percent year-over-year, reflecting the growth in the loan portfolio and higher credit write-offs. 19659006] The company has approximately doubled its annual profit compared to the previous year. American Express generated $ 6.92 billion in 2018 compared to $ 2.75 billion in 2017.
Amex earned $ 2.32 per share in the fourth quarter. This represents a significant year-on-year improvement as a loss of $ 1.42 per share was reported over the same period. Comparable earnings excluding US tax legislation were $ 1.74 per share, with analysts predicting $ 1.80 per share as predicted by Refinitive.
Analysts view US consumer spending, which is closely linked to US consumer spending, as the performance of credit card companies.
"A macro theme for American Express is consumer health, and we've seen pretty good consumer credit in the US," said John Hecht, general manager of Jefferies, to CNBC. "That should mean decent borrowing."
Citigroup, JP Morgan and Bank of America said in their own quarterly reports this week that they expect consumer credit quality to be similar to that of Sandler O & Neill & Partners, 2018, said Christopher Donat. Jamie Dimon, CEO of JP Morgan, said during a phone call with analysts that "consumers are in good shape, they spend money."
American Express reported full-year revenue guidance of 8 to 10 percent over Wall Street expectations of 7.5 percent. The company's full-year earnings forecast is expected to be between $ 7.85 and $ 8.35, which is in line with expectations of $ 8.12.