American Express Co. (AXP - Analyst Report) or AmEx reported first-quarter 2015 operating earnings per share (EPS) of $1.48, comfortably beating the Zacks Consensus Estimate by about 8%. The company kept its earnings streak alive with the fifth consecutive earnings beat. EPS also topped the year-ago quarter figure of $1.33 by 11%. With this result, the company’s average four-quarter beat stands at 4.2%.
American Express Company – Earnings Surprise | FindTheCompany
Net income from operations climbed 6% year over year to $1.53 billion, primarily driven by a higher consumer spending on AmEx cards and a lower share count.
AmEx’s total billed business, or global card spending, rose 3% year over year to $245.6 billion. The rise came on cards used in the U.S. that grew 6% to $169.2 billion, although international business dipped 3% to $76.4 billion primarily due to a stronger dollar and loss of co-branded tie-ups.
Quarter in Details
AmEx posted total revenue, net of interest expenses, of $7.95 billion, down 3% from the prior-year quarter. Excluding revenues from the divested global travel operations in the year-ago quarter, total revenue rose 5%. The upside in revenues was attributable to modest growth in net interest income and the loan portfolio, and decline in interest expenses, partly offset by lower non-interest income. Increased yields, strong credit indicators and higher lending balances drove growth as well.
However, provisions for losses sank 13% to $420 million, primarily owing to larger reserve releases during the reported quarter.
AmEx’s total expenses decreased 5% year over year to $5.2 billion in the reported quarter, primarily reflecting lower operating expenses, partly offset by higher marketing expenses, card member reward and services.
Tax rate was 34% against 35% in the year-ago quarter. Meanwhile, pre-tax operating margin improved to 30.3% during the reported quarter from 27% in the year-ago quarter.
