On January 24, American Express surpassed revenue expectations for the fourth quarter, driven by increased card usage during the holiday season, especially for travel and online shopping.
CFO Christophe Le Caillec highlighted that the strongest spending area was travel and entertainment, attributing the success to a notable performance in airline travel.
Billed business, reflecting spending on AmEx cards, climbed 8% to $408.4 billion, while revenue grew 9% to $17.18 billion, topping the estimated $17.16 billion compiled by LSEG.
According to analysts at William Blair, the growth in billings is crucial for American Express to achieve its target of at least 10% revenue growth.
CEO Stephen Squeri expressed that fourth-quarter spending exceeded expectations and remained robust in the initial weeks of January, buoyed by improved small-business sentiment which translated into increased spending.
Earnings per share for AmEx stood at $3.04, meeting expectations. The company forecasts earnings per share for 2025 between $15 and $15.50, with projected revenue growth of 8% to 10%, slightly differing from the 8.1% anticipated.
While analysts like Kyle Sanders from Edward Jones consider the outlook positive, there may be slight disappointment with the revenue growth forecast due to lofty investor expectations.
Despite a 2.7% decline in early trading of AmEx shares, Zacks Investment Management's portfolio manager, Brian Mulberry, attributes this reaction to investors anticipating exceptional results following the recent stock uptrend.
Mulberry added that "strong growth expectations, coupled with a solid balance sheet and increasing optimism among small businesses, enhance AmEx's attractiveness."