American Express (AXP) Tops Q4 EPS by 52c, Offers Guidance

American Express (NYSE: AXP) reported Q4 EPS of $2.32, $0.52 better than the analyst estimate of $1.80. Revenue for the quarter came in at $10.5 billion versus the consensus estimate of $10.56 billion.

“We continue to see very good returns on the investments we’ve been making to gain share and add scale,” said Stephen J. Squeri, chairman and chief executive officer. “Our growth throughout 2018 was broad-based and well-balanced across geographies and business lines. Card Member spending rose an fx-adjusted 8 percent, lapping a strong year-ago quarter. This was the sixth consecutive quarter with revenue growth of at least 8 percent, and it was driven again by higher Card Member spending, loans and card fees.

“The total revenue we generated in 2018 was well above our initial expectations and gave us the flexibility to make additional investments in the business each quarter. We added 12 million new cards during the year, continued to enhance the range of benefits we offer, and continued to significantly expand the number of merchants in our network. Robust top line growth, consistently good credit quality and the leverage we get from disciplined control of operating expenses delivered strong earnings per share each quarter.

“We remain focused on four strategic priorities:

Expand leadership in the premium consumer space
Build on our strong position in commercial payments
Strengthen our global integrated network to provide unique value and
Make American Express an essential part our customers’ digital lives.

We’ve made great progress on each of them and feel very good about the competitive advantages that come from our business model.

“Our focus is on continuing to make the investments that can drive higher revenue growth, which is the foundation for consistent, double-digit EPS growth. While there are mixed signals in the political and economic environment, based on what we see in the business we are starting 2019 from a position of strength. We expect full year 2019 revenue growth to be between 8 and 10 percent and EPS to be between $7.85 and $8.35, subject to contingencies.”

(*Street sees FY19 EPS of $8.12)

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

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