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American Express (AXP) Tops Q4 EPS by 10c, FY16 Guidance Beats, Offers FY17 Guidance

January 21, 2016 4:06 PM EST

(Updated - January 21, 2016 4:08 PM EST)

American Express (NYSE: AXP) reported Q4 EPS of $1.23, $0.10 better than the analyst estimate of $1.13. Revenue for the quarter came in at $8.39 billion versus the consensus estimate of $8.34 billion.

GUIDANCE:

American Express sees FY2016 EPS of $5.40-$5.70, versus the consensus of $5.41.

American Express sees FY2017 EPS of at least $5.60.

Outlook

“Our 2015 results and outlook reflect the reset in co-brand economics, pressures on merchant fees, the evolving regulatory environment and intense competition that have been re-shaping the payments industry,” said Kenneth I. Chenault, chairman and chief executive officer. “A number of cyclical factors in the broader economy have also weighed on our performance and influenced our outlook. Against that backdrop, and the fact that revenue growth has not accelerated as we anticipated, we are moving aggressively to streamline the company and drive efficiencies in order to take out $1 billion from our overall cost base by the end of 2017.

“We now expect 2016 EPS between $5.40 and $5.70. This reflects a substantial benefit from the planned sale of the Costco co-brand portfolio, offset in part by a continuation of elevated spending on growth opportunities as well as the loss of a partial year of Costco-related earnings. The portfolio transaction is expected to occur mid-year.

“For 2017, we are now targeting EPS of at least $5.60. That includes growing over the portfolio gain and this year’s Costco-related earnings. It also includes a combination of accelerated revenue growth, aggressive expense reductions and the use of our capital strength to create value for shareholders. The 2016-17 earnings targets do not include restructuring charges or other contingencies.

“We have a great set of assets to draw upon, including a trusted brand, financial strength, an integrated business model, world class service and a history of innovation. We’re confident that we’ll not just deal with our near-term challenges, but return to growth and position the company for long-term success.”

For earnings history and earnings-related data on American Express (AXP) click here.



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