American Express Co. Beats On Earnings, Misses On Revenue Estimates

Based in New York City, New York, American Express Co. (AXP - Analyst Report) is primarily engaged in the business of providing travel related services, financial advisory services, and international banking services throughout the world.

The global electronic payment processor has publicly stated that it was up against several challenges in the recent second quarter, and has warned of a likely lower EPS for the company’s stock compared to the same quarter last year. Rising expenses, loan loss provisions, foreign currency fluctuation and a stressed discount rate are all issues that AXP has been dealt in the past quarter, in addition to the company recently being convicted of engaging in antitrust practices by the U.S. Justice Department.
 
AXP also recently terminated several partnerships with prominent such as Costco (COST - Analyst Report) and JetBlue (JBLU - Analyst Report), adding to the list of reasons that has caused investors to lose some confidence that the company will be able to produce an earnings beat.
 
AXP’s recent earnings report history has helped to ease concerns though, as the company has beat on earnings in each of the last 4 quarters, with an average earnings surprise of 4.18%. Analyst estimate revision has been positive lately as well, with 2 analysts upping their estimate for the quarter in the last 7 days, and a total of 3 having upped their estimates in the last 30 days.
 
AXP is currently a Zacks Rank #3 (Hold), though that ranking could be on the move based off of the results of the company’s most recent earnings report. Anticipation for the report has grown as of late, and finally it has been posted. Below are several key figures that have been highlighted from AXP’s recently released report:
 
Earnings: AXP was able to post a beat on earnings for the second quarter. Reported EPS for the quarter was $1.42, much higher than the Zacks Consensus Estimate of $1.33. (These figures take out stock option expenses)
 
Revenue: Reported revenue was lower than what was previously estimated. Revenue was estimated to be $8.45 billion for the quarter, but AXP posted revenue of $8.3 billion.
 
Key Stat to Note: AXP reported Net Income of $1.47 billion for the second quarter, a decrease from its 2014 Q2 net income of $1.53 billion.
 
Stock Price: Slight after the earnings report was released AXP’s stock price saw a decrease of $.99, or 1.25%, as of 4:15 PM ET in after hour trading.