Earnings

Amex Q2 Billed Business Gains 5 Percent YOY

American Express

American Express posted results that largely met expectations for the second quarter, based on continued card spending and loan growth.

In terms of headline numbers, the adjusted earnings per share of $2.07 was 5 pennies above consensus.

Revenue, reported as net of interest expense, was $10.8 billion, up 8 percent year on year and slightly below consensus.

Drilling down a bit into segment level data, the Global Consumer Services Group Q2 posted revenue growth of 10 percent, to $5.8 billion. Growth was driven by loans, spending on cards and card fee revenues.

Billed business was up 5 percent to $311.7 million in the quarter, up 5 percent year on year. Within that segment, U.S. growth was up 7 percent to $209.2 million.

The company said in its earnings supplementals that average spending on its cards was up 2 percent to a bit more than $5,000. Outside the U.S. growth was up slightly at 3 percent to an average reported in the second quarter of $4,059.

In terms of loans extended to consumers, in the U.S. the growth rate was 10 percent to $72.6 billion. That growth was outpaced by international metrics, where loans stood at $10.6 billion, up 16 percent. Worldwide provisions were up 10 percent to $603 million in the latest quarter.

American Express also said in its results that proprietary commercial billed business was up 6 percent. Within commercial services, total revenues gained 7 percent, with revenues of $3.4 billon. Billed business was markedly higher in Latin America than had been seen elsewhere, at 6 percent and where it had been low single digits elsewhere.

In remarks tied to card growth, CEO Steve Squeri said that the firm added 2.9 million proprietary cards in the quarter and said that about 70 percent of the new consumer cards have annual fees. In the United States, proprietary cards in force were up 2 percent to 37.6 million. Outside the U.S. the 5 percent growth landed the firm at 17.4 million cards.

Looking more granularly at the card data, in the United States, net write-offs, inclusive of principal and fees, was 1.4 percent, up slightly from a year ago at 1.5 percent, the rate was flat internationally over the same period at 1.4 percent.

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