The Stock Of American Express Slips On Record Card Spending

(CTN News) – It has been reported that American Express (AXP – Get Free Report) – Get Free Report published better-than-expected second quarter earnings Friday, but missed Street revenue forecasts and set aside a much higher amount of cash to cover potential bad consumer debts than was previously expected.

The earnings for the three months ending in June for American Express were $2.89 per share, an increase of 9.31% over the same period last year and a penny short of Wall Street’s consensus forecast of $2.81 per share for the same period.

There was an overall growth of 12.3% for American Express’ group revenues, which reached $15.05 billion, a company record, though it fell short of analysts’ estimates of $15.48 billion.

As a result, total network volumes reached an all-time high of $426.6 billion, a 8% increase over last year.

As part of its earnings report, the company also revealed that credit provisions were up nearly three-fold from last year, to $1.198 billion, while expenses rose by 7% to $11.1 billion.

As it looks forward to the second half of the year, American Express has stated that it expects group revenue to grow by 15% to 17%, with earnings per share in the range of $11.00 to $11.40 in the second half of the year.

According to American Express CEO Stephen Squeri, over 70 percent of the new accounts we acquired in the quarter were based on our fee-based products, which was a sign that our premium products continue to see strong demand.

The Millennial and Gen Z cohorts of consumers continued to be our fastest-growing customer cohort in the quarter, representing more than 60% of new consumer accounts acquired globally in the quarter, with spending by this cohort increasing by 21% in the United States over the prior year.

As a result of our premium customer base and our continued thoughtful risk-management decisions, we are able to offer the best credit performance in the industry,” he said.

As part of our differentiated model, our partnerships are an integral part of delivering unique value to our customers. They are an important part of how we differentiate ourselves from our competitors.

In pre-market trading on Friday afternoon, American Express shares were marked 2.72% lower than their previous close to indicate an opening bell price of $172.30 for the company following the earnings release.

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