Amex tops estimates as premium card spending stays strong

[NEW YORK] American Express reported earnings that exceeded estimates as spending on the firm’s premium credit cards climbed in the first three months of the year.

Billed business – transactions on credit cards and other products issued by the company – increased 10 per cent to US$428 billion, according to a statement on Thursday (Apr 23). That topped the US$420.6 billion average estimate of analysts surveyed by Bloomberg.

Chief executive officer Steve Squeri said the company is maintaining its full-year guidance, expecting that revenue will increase 9 per cent to 10 per cent and earnings per share will range from US$17.30 to US$17.90. First-quarter adjusted earnings per share were US$4.28, beating the US$4.03 average estimate.

Amex also “decided to increase our investments in marketing and technology to capitalise on long-term growth opportunities,” Squeri said the statement. 

Costs in the quarter totalled US$13.9 billion, above the US$13.7 billion average estimate from analysts. 

Squeri said in March that Amex is positioned to benefit from the rise of artificial intelligence and its impact on commerce, likening the shift to that of e-commerce and mobile payments. Squeri’s comments in his annual letter followed some market reactions to a research report that trigged concern about potential job displacement and economic disruption caused by AI.

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Amex will also be refreshing its business credit cards and other products this year. Last month, the company announced a new Graphite business cash-back card, with an annual fee of US$295. BLOOMBERG