American Express Stock Slips After Revenue Comes in Lighter Than Expected
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Key TakeawaysAmerican Express reported second-quarter profit above estimates Friday, with revenue and net interest income (NII) falling short.The company joined other banks that recently reported earnings in posting sequentially lower NII.Shares fell more than 4% soon after markets opened.
American Express (AXP) reported larger profits than analysts had expected for the second quarter Friday, despite revenue and net interest income (NII) that fell short of estimates.The banking and credit card provider reported record quarterly revenue of $16.33 billion, but analysts had expected $16.56 billion. Profits of $3.02 billion, or $4.15 per share, handily beat projections of $2.37 billion and $3.26 per share, according to consensus estimates compiled by Visible Alpha.American Express said its earnings per share (EPS) received a boost of about $0.66 thanks to the closing of its sale of Accertify, a fraud prevention company it acquired in 2010.American Express Joins Banks Posting Quarterly NII DropsAmerican Express also joined peers in the finance industry in reporting sequentially lower NII, dropping slightly to $3.73 billion from $3.77 billion in the first quarter. Analysts had expected NII to rise quarter-over-quarter to $3.8 billion.American Express Chief Executive Officer (CEO) Stephen Squeri said the company is affirming its revenue growth projections of 9% to 11% for the full fiscal year, while also lifting EPS projections to a range of $13.30 to $13.80, up from $12.65 to $13.15 previously. Analysts currently project full-year EPS of $12.99.Squeri said the top- and bottom-line growth in the quarter was driven by increased billings, more than 3 million new card acquisitions, and double-digit growth in card fees revenue.American Express shares were down 4.3% to $238.48 as of 10 a.m. ET Friday. Read the original article on Investopedia.
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