Amex Misses In Q4 Amid Lending Write-Offs

American Express posted earnings results on Thursday (Jan. 17) after markets closed that missed the Street, as merchant and services revenues were both below expectations, and write-offs tied to its lending business grew. Specifically, card member loan provisions were $679 million, up 21 percent from last year.

In terms of headline numbers, revenues of roughly $10.5 billion were below expectations $10.6 billion. Adjusted earnings were $1.74, which missed consensus estimates by six pennies.

Consolidated provisions for losses totaled at $954 million, up 14 percent from $834 million, which the company said in its release was tied to growth in the loan portfolio and higher lending write-off rates. Total loans were up 12 percent to $81.9 billion. The total of 30 days past due in this segment was 1.4 percent, up by about 10 basis points from the third quarter of 2018.

Drilling down a bit, results from consumer and commercial services rose, but showed less transactions in the merchant and network services operations. In the consumer group, revenues were up 11 percent to $5.6 billion, and commercial services saw growth of 8 percent to revenues of $3.3 billion. Merchant services sales were unchanged from last year at $1.6 billion.

Net card fees were up 11 percent year on year, according to filings, to $897 million.

The company said that billed business, which reflects activities related to cards, was up 10 percent worldwide tied to consumer cards, and commercial cards were up 9 percent. Total billed business was $136.6 billion. Total cards in force were up 7 percent to 54.5 million, according to filings. Average member spend was up 4 percent to a bit more than $3,500.

The company said its total net write-off rate was 1.5 percent (principal only), unchanged from last year. The 30 days’ past due rate was also unchanged at 1.2 percent, as compared to a year ago.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.