The New York-based company also reported record revenue for 2023, a year which many analysts feared could bring in a recession and crimp customer spending.
AmEx, helped by its affluent customer base, has been able to navigate a tricky financial landscape more smoothly compared to some of its peers.
High-earning individuals are less sensitive to inflation and the surge in borrowing costs, which has worried customers in lower-income brackets.
“We have achieved what we set out to do, and we are ahead of where we thought we’d be on our journey,” American Express (NYSE:AXP) CEO Stephen Squeri said.
However, some caution prevailed, with the credit card giant raising its loan loss provisions in the fourth quarter to $1.44 billion, compared with $1.03 billion a year earlier.
Eleven rate hikes by the U.S. Federal Reserve have made borrowing expensive and increased risks of more defaults, especially as credit card debt is typically costlier than other loans.
AmEx posted a profit of $2.62 per share for the three months ended Dec. 31, up from $2.07 per share a year earlier. Analysts had expected a profit of $2.64 per share, according to LSEG data.
The company’s total revenue for the fourth quarter rose 11% to $15.80 billion. For 2023, its revenue rose 15% to $60.52 billion.
It forecast 2024 earnings per share between $12.65 and $13.15, higher than analysts’ estimates of $12.41.
The results come a day after peer Visa Inc (NYSE:V) posted upbeat quarterly results fueled by strong spending on travel and holiday shopping. However, smaller peers Discover Financial and Capital One saw lower profits in the quarter due to higher credit loss provisions.
Source: Economy - investing.com
