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American Express guides higher for 2020, pushing shares to record high

By Alexander Bueso

Date: Friday 24 Jan 2020

American Express guides higher for 2020, pushing shares to record high

(Sharecast News) - Shares in financial services giant American Express notched up a fresh record high as the company beat estimates on the Street for both its fourth quarter revenue and earnings, and guided higher on both its top and bottome lines.

"During 2019, we added 11.5 million new proprietary cards and continued to deliver solid billings growth. Almost 70 percent of our new Card Members are choosing our fee-based products, helping to drive card fee revenue growth of 17 percent," said Stephen J. Squeri.

For the quarter ending on 31 December, the iconic outfit best known for its credit cards only managed to edge past forecasts for its topline, posting a roughly 9.0% rise in three-month sales to reach $11.365bn (consensus: $11.36bn).

But on an adjusted basis, which excludes the year ago tax gain of $496.0m from the base of comparison, earnings per share jumped by 17.0% to $2.03 (consensus: $2.01).

Precisely due to the high base for comparison from last year's corporate tax cuts on the other hand, net income on a per share basis fell 13% to $2.03.

Also helping to boost that EPS number was an approximately 4.0% reduction in the number of shares outstanding in the company.

Expenses on a consolidated basis however also rose by 9%, to reach $8.4bn, while provisions for losses were 7% ahead to $1.0bn.

By operating units, Global Consumer Services sported a 21% jump in quarterly net income to $846.0m on a 10.0% rise in sales to $6.2bn, while in Global Commercial Services profits were up by 1.0% to $617.0m and revenues by 7.0% to $3.5bn.

In Global Merchant and Network Services, the bottom line increased 10.0% to $501.0m and sales by 3.0% to $1.7bn.

The company's net profit in the Corporate and Other segment of $183.0m in 2018 on the other hand was erased and replaced by $319.0m of red ink.

Looking out to 2020, American Express guided towards revenue growth on a constant currency basis of 8.0-10.0%, for EPS of $8.85-9.25.

As of 1617 GMT, shares of American Express were 2.65% higher to $134.89, having pulled back from their record intra-day level of $138.13.


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