American Express Beats Q2 Profit Forecast; Shrugs Off Rival Card Threats
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The credit card business produced $4.08 per share in adjusted earnings, which was more than LSEG's average projection of $3.89. The company's revenue rose 9% from the previous year to $17.9 billion, which was a little more than predicted.Executives were optimistic that the company's long-term focus on wealthy customers, which includes special benefits, restaurant booking services like Resy and Tock, and the next redesign of its Platinum card, will help it stay ahead. Christophe Le Caillec, the CFO, told Reuters that he was excited about the challenge from Citigroup's proposed "Citi Strata Elite" card. He claimed that clients will still choose AmEx when they compare since the company has assets that its competitors don't have.American Express still depends on its high-end offerings, which focus on experiences and exclusivity rather than simple payback advantages. Experts think that this plan has helped the business get a lot of customers that other businesses would like to have. Stephen Squeri, the CEO, said that people kept spending the same amount of money, even when the economy was awful. Rich people with cards kept traveling and spending. However, AmEx did raise its credit loss reserve to $1.4 billion and noted that spending on airlines was still low.Even though AmEx's shares did better than expected, they fell more than 3% on the day. This year, they have gone up 6.3%, which is less than the 7% gain of the S&P 500. The corporation kept to its projection for 2025 that earnings per share would be between $15 and $15.50 and that sales would climb by 8% to 10%.
This article first appeared on GuruFocus.
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