American Express says its revenue came in weaker than expected in Q1
- American Express says its revenue came in weaker than expected in Q1.
- The financial services company reports £1.59 billion of net income.
- American Express shares slid roughly 4% in premarket trading on Friday.
American Express Co. (NYSE: AXP) said on Friday that its revenue in the fiscal first quarter fell shy of Wall Street estimates due to the COVID-19 restrictions.
American Express shares that you can learn to buy online here slid roughly 4% in premarket trading on Friday but regained almost half of the intraday loss on market open. Including the price action, the stock is now exchanging hands at £104.15 per share. In comparison, it had started the year 2021 at a lower £85.12 per share.
American Express Q1 financial results versus analysts’ estimates
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American Express said that its net income in the first quarter came in at £1.59 billion that translates to £1.98 per share. In the comparable quarter of last year, its net income was capped at a sharply lower £264.64 million or 29.56 pence per share.
The financial services firm valued its revenue at £6.53 billion (net of interest expense) in Q1 versus the year-ago figure of a higher £7.43 billion. American Express attributed the decline to lower loan volumes, member spending, and average discount rate.
According to FactSet, experts had forecast the company to post £6.64 billion of revenue in the recent quarter. Their estimate for per-share earnings stood at £1.16. In the prior quarter (Q4), American Express had posted £1.05 billion of profit, as per the report published in the last week of January.
Chief Executive Stephen Squeri’s comments on Friday
Excluding travel and entertainment, member spending, American Express added on Friday, was 11% up on a year over year basis. CEO Stephen Squeri said:
“We view 2021 as a transition year, where we are focused on making investments to rebuild growth momentum in our core business. We’ve fired up our card acquisition engine, adding 2.1 million new proprietary cards during the quarter. Also, the additional value we provided on several of our premium products is helping to drive increased Card Member engagement, and our attrition rates and customer satisfaction levels remain better than pre-pandemic levels.”
In separate news from the United States, personal care corporation Kimberly-Clark also published its quarterly earnings report on Friday.
American Express remained almost flat on average in the stock market last year with an annual decline of roughly 2%. At the time of writing, the New York-based multinational now has a market cap of £83.71 billion and a price to earnings ratio of 38.36.