Record Spending and Growth Forecasts Fail to Buoy Investor Sentiment
American Express (AXP) shares trading flat in premarket trading on Friday, despite the financial services giant reporting fourth-quarter fiscal 2024 results that aligned with analysts’ expectations.
The company posted net income of $2.17 billion, or $3.04 per share, on revenue of $17.18 billion, nearly matching Wall Street estimates of $3.05 per share on the same revenue. Net interest income came in slightly below projections at $4.04 billion, compared to the anticipated $4.09 billion.
CEO Stephen Squeri highlighted strong consumer and commercial spending during the holiday season, driving record annual cardholder spending, net card fee revenues, and 13 million new card acquisitions. “We continued to expand our global network, adding millions of merchant locations,” Squeri said.
Looking ahead, American Express forecasts revenue growth of 8% to 10% in 2025 and earnings per share between $15.00 and $15.50, aligning closely with analysts’ expectations of 8.2% revenue growth and $15.26 EPS. Additionally, the company announced plans to increase its quarterly dividend by 17% to $0.82 per share, reflecting confidence in its financial outlook.
The report follows a strong earnings season for major banks, buoyed by a rebound in Wall Street dealmaking. However, investors appeared unimpressed, with American Express shares retreating from Thursday’s record close of $325.87. Despite the dip, the stock remains up roughly 75% over the past 12 months.
While American Express continues to demonstrate resilience and growth in a competitive financial landscape, the slight earnings miss and tempered investor reaction underscore the challenges of sustaining momentum amid high expectations.
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