American Express reported fourth-quarter results that fell short of expectations, with profit totaling $1.6 billion and earnings per share of $2.07. Revenue for the quarter amounted to a record $14.2 billion, an increase of 17% from the year-ago quarter. Wall Street was more interested, however, in the company’s plans to return capital to shareholders.
AmEx’s profit saw a drop attributed partly to a $492 million increase in its reserve for credit losses, compared to a release of $168 million a year ago. Additionally, the card company’s expenses rose 15%, due to an increase in compensation and higher customer engagement costs. Despite these challenges, AmEx achieved 25% revenue growth and exceeded prior guidance. This was driven by a higher usage of cards for travel and other purchases by households and businesses. In line with its positive results, the company is rewarding shareholders with a 15% boost in the quarterly dividend to 60 cents a share.
American Express (AmEx) has projected revenue growth of 15 to 17 percent and earnings per share of $11 to $11.40 in 2023. Squeri, CEO of AmEx, noted on Friday that their strategy is paying off, and that business has been strengthened since the start of the pandemic. The stock value rose by 5% in premarket trading, following other credit card companies such as Mastercard and Visa, who have also seen significant success in spite of the economic troubles.
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