American Express drops after Q1 results

1:27 PM 19 April 2024

American Express (AXP.US), US financial services company, reported Q1 2024 results today ahead of the Wall Street session open. Report turned out to be slightly better-than-expected, but the stock moved lower in premarket anyway. 

Company's total revenue jumped 10.6% YoY to $15.80 billion. While this was slightly more than expected, it was also a further moderation in growth. Year-over-year revenue growth rate for Q1 2024 was the slowest since Q1 2021. However, growth in total expenses was slower, hinting at an improved efficiency. Company said that a strong jump in profit reflects continued business momentum and that an increase in provisions for loan losses resulted from higher net charge-offs.

However, while results for Q1 2024 beat expectations, this improvement in business was not big enough to trigger an outlook upgrade. Company still expects full-year revenue to grow 9-11% this year, while EPS is still expected to reach $12.65-13.15, which would mark an increase of 12.8-17.3% compared to 2023. 

Q1 2024 earnings

  • Revenue: $15.80 billion vs $15.77 billion expected (+10.6% YoY)
    • Discount revenue: $8.38 billion vs $8.38 billion expected (+5.4% YoY)
  • Provisions for credit losses: $1.27 billion vs $1.31 billion expected (+20.3% YoY)
  • Total expenses: $11.39 billion vs $11.58 billion expected (+3% YoY)
    • Card reward expenses: $3.77 billion vs $3.97 billion expected (+0.2% YoY)
  • Network volume: $419.2 billion vs $419.3 billion expected (+5.1% YoY)
  • Total card member loans: $126.6 billion (+16% YoY)
  • Effective tax rate: 22.5% vs 23.5% expected (16.2% a year ago)
  • Net income: $2.44 billion vs $2.19 billion expected (+34.2% YoY)
  • EPS: $3.33 vs $2.96 expected ($2.40 a year ago)

Full-year 2024 forecasts

  • Revenue growth: unchanged at 9-11%
  • EPS: unchanged at $12.65-13.15 vs $12.83 expected

American Express beat expectations, but growth in net revenue continued to moderate in Q1 2024 and was the slowest since Q1 2021. Source: Bloomberg Finance LP, XTB Research

American Express (AXP.US) is trading a touch lower in premarket, following release of Q1 2024 report that beat expectations but did not include outlook upgrade. Stock has recently broken below the 50-session moving average (green) and has been struggling to climb back above it. Source: xStation5

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