Home›Earnings›Results›American Express shares fall after Q2 beat as costs an…

American Express shares fall after Q2 beat as costs and spending rise

The card issuer cut its Q2 credit-loss provision to $1.1 billion and raised its full-year revenue growth outlook to 10%, but investors focused on higher expenses tied to customer acquisition.

Reported · Written up by our desk · Results

American Express shares dropped sharply on Friday after the company reported stronger-than-expected second-quarter earnings and lifted its full-year revenue growth forecast, while investors zeroed in on rising costs and spending aimed at acquiring customers, LiveMint Markets reported. By 1:10 p.m. EDT in New York, the stock was down 5.34%, or $18.20, to $322.64, its steepest intraday decline in nearly five months.

The company continued to benefit from resilient spending by affluent customers across travel, dining, and other discretionary categories despite broader economic uncertainty. Total card spending, or billed business, rose 9% year over year to $455.8 billion on a foreign exchange-adjusted basis, and quarterly revenue increased 10% to $19.6 billion.

For the quarter ended June 30, American Express reported earnings of $4.53 per share, up from $4.08 a year earlier and above the $4.40 average estimate compiled by LSEG. It also reduced its provision for credit losses to $1.1 billion from $1.4 billion in the prior-year period, signaling improving credit quality, while leaving its full-year earnings outlook unchanged.

American Express said it was seeing stronger momentum than expected and that investments in its value propositions helped drive accelerated spend and revenue growth. The company raised its full-year revenue growth guidance to 10%, up from earlier guidance of 9% to 10%, while keeping its earnings forecast steady as investors looked to consumer spending trends ahead of results from other payment networks.

More like this

Sources