AmEx's revenue miss eclipses strong annual profit forecast
Business
AmEx's revenue miss eclipses strong annual profit forecast
(Reuters) - American Express's (AXP.N), opens new tab second-quarter revenue jumped 9% to a record $16.33 billion on the back of robust spending from its wealthy customers but still fell short of expectations, sending shares of the credit card giant down 4.4%.
Known for its affluent cardholders, the company has been somewhat insulated from weakness in the economy, even as rival lenders warn of tepid loan demand at a time when borrowing costs are at their highest since the global financial crisis.
But a slowdown in spending growth compared to the prior quarter worried some investors, especially as data shows that wage growth has begun to lose some steam, possibly impacting discretionary spending.
Billed business, a measure of spending on AmEx cards, rose 6% from last year in the second quarter. It had expanded 7% in the first quarter.
Still, the company raised its 2024 earnings per share forecast to between $13.30 and $13.80, versus the $12.65 to $13.15 range it expected earlier.
"We remain confident in management's ability to mitigate softer top line with expense control and achieve the EPS target," said Citigroup analyst Keith Horowitz.
