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American Express (AXP) Q1 Earnings Surpass, Decline Y/Y

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American Express Co. AXP reported first-quarter 2021 earnings of $1.74 per share, beating the Zacks Consensus Estimate by 3.6% on the back of lower expenses. However, the bottom line fell 12.1% year over year due to muted revenues.

Total revenues of $9.06 billion missed the Zacks Consensus Estimate by 1.9% and also declined 12.1% year over year. Revenues suffered declines in Card Member spending and loan volumes as well as a lower average discount rate from the prior-year level.

Meanwhile, total expenses of $6.7 billion decreased 7% year over year owing to lower customer engagement costs on the back of limited Card Member spending as well as a controlled usage of travel-related Card Member benefits.

Provision for credit losses resulted in a benefit of $675 million compared with provision expense of $2.6 billion in the year-ago quarter.

Return on equity of 22.6% declined 180 basis points year over year.

American Express Company Price, Consensus and EPS Surprise

American Express Company Price, Consensus and EPS Surprise
American Express Company Price, Consensus and EPS Surprise

American Express Company price-consensus-eps-surprise-chart | American Express Company Quote

Segmental Performances

American Express’ Global Consumer Services segment reported pre-tax income of $2.1 billion compared with $231 million in the year-ago period. Total revenues, net of interest expenses of $5.3 billion, decreased 11% year over year, reflecting a fall in Card Member spending and loan volumes.

Global Commercial Services posted pre-tax income of $665 million compared with $19 million in the year-ago quarter. Total revenues, net of interest expenses, were $2.7 billion, which in turn, decreased 14% year over year, mirroring a decline in Card Member spending.

Global Merchant and Network Services’ net income plunged 24.8% year over year to $414 million in the reported quarter. Total revenues, net of interest expenses, were down 13% year over year to $1.2 billion, mainly due to reduced Card Member spending and the average discount rate.

Strong Financial Position (as of Mar 30, 2021)

Cash and cash equivalents were $40 billion, up 3% year over year. Total long-term debt of $42 billion was down 21% year over year.

Zacks Rank

American Express carries a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider

Some other stocks worth considering with the apt combination of elements to surpass estimates this reporting cycle are as follows:

EVO Payments, Inc. EVOP has an Earnings ESP of +16.67% and is presently Zacks #3 Ranked.

Intercorp Financial Services Inc. IFS has an Earnings ESP of +6.77% and is presently Zacks #2 Ranked.

Oportun Financial Corporation OPRT has an Earnings ESP of +60.00% and a Zacks Rank #2 (Buy), currently.

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American Express Company (AXP) : Free Stock Analysis Report

EVO Payments, Inc. (EVOP) : Free Stock Analysis Report

Oportun Financial Corporation (OPRT) : Free Stock Analysis Report

Intercorp Financial Services Inc. (IFS) : Free Stock Analysis Report

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