“Our strong first-quarter results demonstrated the continued business momentum we’ve achieved over the last several quarters despite the uncertain macro environment,” said CEO Stephen Squeri.
American Express (AXP) – Get American Express Company Report posted stronger-than-expected first quarter earnings Friday, while confirming its full-year profit forecast, as travel and entertainment spending surged to reclaim levels last seen just prior to the 2020 pandemic.
American Express said diluted earnings for the three months ending in March were pegged at $2.73, down one penny from the same period last year but firmly ahead of the Street consensus forecast of $2.44 per share.
Group revenues, American Express said, rose 29.5% to $11.74 billion, just ahead of analysts’ forecasts of an $11.6 billion tally as consumer credit spending hit a record in March even as the impact the American Rescue Act as well as child tax credits and enhanced unemployment benefits for U.S. customers faded.
Looking into the coming year, American Express reiterated its forecast for earnings in the region of $9.25 and $9.65 per share with revenue growth of between 18% and 20%.
““Our strong first-quarter results demonstrated the continued business momentum we’ve achieved over the last several quarters despite the uncertain macro environment,” said CEO Stephen Squeri. “This performance was enabled by our ongoing investments in areas critical to sustainable, long-term growth, including customer acquisition, engagement and retention.”
“We also saw increased engagement across our customer categories … goods and Services spending, which is the largest category of spending on our network, continued to accelerate in the quarter, growing 21% over last year,” he added. “Travel and entertainment spending was up 121% over a year ago and essentially reached pre-pandemic levels globally for the first time in March, driven by continued strength in consumer travel.”
Stocks Edge Lower, Twitter, Gap, Snap and Disney – Five Things To Know
American Express shares were marked 1.5% higher in pre-market trading immediately following the earnings release to indicate an opening bell price of $188.50 each.
U.S. retail sales growth eased again in March, data from the Commerce Department indicated last week, as record high gas prices and surging inflation looks to have hit discretionary consumer spending.
March retail sales rose 0.5% from the previous month to a collective $665.7 billion, the Commerce Department said, just shy of the Street consensus forecast of a 0.6% advance. The February total was revised firmly to a gain of 0.8%, the Commerce Department report showed, from the original estimate of a 0.3% advance.
U.S. inflation, meanwhile, accelerated to the fastest pace in four decades in March, thanks in part to record high gasoline prices and a surge in global oil.
U.S. crude futures hit a ten-year high of $123.70 per barrel last month in the immediate wake of Moscow’s invasion and the threat of sanctions on energy exports, while wheat and other food prices leaped on reports of damaged crops and grain embargoes linked to the conflict.
