- American Express climbs to a record high following upbeat quarterly performance results.
- American Express beats analysts' estimates for earnings, revenue, and net card fee in Q4.
- American Express cites strong consumer sentiment to have contributed to the upbeat performance.
- American Express received approval from China's central bank to operate in the region.
American multinational financial services corporation, American Express (Amex), announced its performance results for the fourth quarter on Friday. Beating the analysts’ estimates on earnings and revenue, Amex was seen trading higher in the stock market yesterday. The company particularly cited revenue from card fee to have contributed to the most in upbeat results.
In premarket trading, American Express was reported to have gained 2.4%. The financial services company is performing fairly well in 2020 so far. Share prices have surged around 8% in January. Last year also remained kind to Amex in the stock market. The stock opened in January 2019 at around $95 per share. With an annual gain of over 30%, it was reported trading around $125 in December. At the time of writing, American Express is exchanging hands at around a record high of $136.85.
Earnings Report Versus The Analysts’ Estimates
According to Refinitiv, analysts had anticipated Amex to post $11.36 billion in revenue in the fourth quarter. In terms of earnings per share, experts had estimated $2.01 in the recent quarter. As per Friday’s report, the American multinational made a higher $2.03 per share in Q4 while quarterly revenue was noted marginally higher than the forecast at $11.365 billion. As per Street Account, the estimate for net card fees was capped at $1.05 billion while the earnings report announced it at $1.08 billion.
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In terms of adjusted annual profit, Amex reported $8.30 per share that marked a 12% increase as compared to 2018. For fiscal 2020, the financial services company now expects to make $8.85 to $9.25 of earnings per share. Based on Refinitiv’s data, analysts had forecast an EPS of $8.49 to $9.67 per share for American Express in 2020. On revenue’s front, Amex expects an 8-10% growth this year.
American Express Cites Strong Consumer Sentiment For Upbeat Performance
According to the analysts, Amex’s upbeat quarterly performance mirrors the stability in consumer sentiment towards the end of 2019. Despite the economic slowdown and trade tensions, the University of Michigan recently accentuated the U.S consumer strength to be standing firm around a multi-year high.
Further reasons cited for optimism in the Q4 earnings report included the company having received formal approval from the central bank in China that enables it to make clients in the second-largest economy of the world. All in all, the company stated a mix of spending and lending revenues to have helped sustain its performance in the recent quarter.