American Express Reports Mixed Q2 Earnings with 8% Revenue Growth, Stock Fluctuates

American Express Co. reported its second-quarter earnings, revealing a revenue increase of 8% from last year, totaling $16.33 billion. This figure, however, fell short of the analyst consensus expectation of $16.59 billion. After the earnings report, the company’s stock initially rose but later retraced its gains in premarket trading on Friday. The growth in revenue was attributed to a rise in net interest income, boosting card member spending, and ongoing increases in card fee revenue.

Card member spending, a significant driver of revenue for American Express, showed a 5% year-over-year increase to $388.2 billion. The company also noted that its U.S. Consumer Services revenue climbed to $7.73 billion, reflecting a strong 12% growth. Meanwhile, revenue from Commercial Services increased by 6% to $3.95 billion, and International Card Services saw a 9% rise to $2.82 billion. Global Merchant and Network Services grew by 1%, totaling $1.87 billion. Total expenses increased slightly to $11.3 billion, mainly due to higher costs in customer engagement and marketing efforts.

Looking ahead, American Express maintains a positive outlook for the current fiscal year. The company projects revenue growth in the range of 9% to 11%, aiming for $65.96 billion to $67.17 billion, slightly above analysts’ expectations. The Chairman and CEO, Stephen J. Squeri, highlighted the intention to boost marketing spending by approximately 15% without relying on transaction gains. Adjusted earnings per share (EPS) outlook has also been raised to between $13.30 and $13.80, an increase from previous estimates. Despite the mixed market reaction to its quarterly performance, the overall sentiment around American Express remains optimistic.