Given the rapturous response last week to results from two of Wall Street’s biggest banks and the growing feeling the US economy is on track for a ‘soft landing’, it should be no surprise shares in leading credit-card provider American Express (AXP:NYSE) are trading at all-time highs ahead of its third-quarter results on 18 October.
Revenue for the three months to September are expected to be up around 8% to $16.65 billion, while EPS (earnings per share) are seen more or less flat at $3.27, although the group has surprised positively in three of the last four quarters and raised its guidance last time round, so statistically speaking Friday’s results should be a shoe-in.
We suspect there is likely to be just as much interest in the firm’s comments on the health of the US consumer as there is in the actual numbers – in other words, the quality rather than the quantity of the report.
At the half-year stage, the group noted a slight slowdown in some categories of travel and entertainment such as airlines and hotels, but restaurants – one of its biggest businesses – remained strong.
By customer, its premium subscriber base continued to show steady growth in the first half, while interestingly US ‘millennial’ and ‘GenZ’ customers grew their spending by 13% driving the highest billed business within the travel and entertainment segment.
Moreover, according to chief finance officer Christophe Le Caillec, these younger card members show strong engagement with the brand, transacting over 25% more on average than older customers, and in some categories like dining, transacting almost twice as much.
‘While we are not in a high-growth spend environment, particularly in the US, our spending volumes are tracking in line with our expectations and support our revenue expectations for the year,’ said Le Caillec.
US UPDATES OVER THE NEXT 7 DAYS
FULL-YEAR RESULTS
18 Oct: Ally Financial, American Express, Procter & Gamble, Schlumberger
22 Oct: Alphabet, Baker Hughes, CoStar, Danaher, Freeport-McMoRan, General Motors, Kimberly-Clark, Lockheed Martin, Moody’s, Philip Morris, Texas Instruments, Verizon
23 Oct: AT&T, Boeing, Boston Scientific, Coca-Cola, General Dynamics, Hilton Worldwide, NextEra Energy, Tesla, Thermo Fisher Scientific, United Rentals
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