American Express Co. has exceeded Wall Street expectations with its financial forecasts for 2024, despite seeing an increase in net write-offs in the latest quarter.
Strong Financial Performance
Total revenue net of interest expense reached $15.8 billion, marking an 11% increase from the previous year’s $14.2 billion. While analysts were looking for $16.0 billion, Amex still outperformed their projections.
Amex’s billed business grew by 6% to reach $379.8 billion. According to Chief Executive Stephen Squeri, “We continued to drive strong customer engagement, and demand for our premium products remained robust.”
Robust Profitability
The company reported net income of $1.9 billion, translating to earnings per share of $2.62. This represents an improvement from the year-prior period’s $1.6 billion and $2.07 earnings per share. Although analysts had been expecting $2.64 earnings per share, Amex managed to deliver strong profitability.
Provisions for Credit Losses
Amex’s total provisions for credit losses increased to $1.4 billion from $1.0 billion, primarily due to higher net write-offs. However, this was partially offset by a lower net reserve build of $400 million, compared to $492 million in the previous year.
Positive Outlook
Dividend Increase
In addition to their strong financial performance, Amex announced a planned 17% increase in their dividend. The quarterly dividend will rise to 70 cents a share from the previous 60 cents a share, starting with the first-quarter dividend declaration.
