American Express Posts Lower Earnings
American Express (NYSE: AXP) reported Q4 EPS of $0.91, $0.07 lower than analyst estimates of $0.98. Revenue for Q4 came was $8 billion vs. estimates of $7.95 billion.
“While we continue to operate in a very challenging environment, we ended the year in a stronger position than we started and have built momentum across our business. There is still more work to do, but given our progress to date, we expect EPS for 2017 to be between $5.60 and $5.80. That outlook is built on a set of priorities designed to put us in a strong position for 2018 and the years ahead.” the firm said.
American Express reported Q4 earnings which fell short of analysts’ expectations on Thursday. The largest credit card issuer by transactions posted Q4 adjusted earnings of 91 cents on revenue of $8.02 billion.
The company posted both lower top- and bottom-line numbers in the final quarter of the year, but the firm said it has made progress in turning around its business since the loss of its partnership with Costco.
American Express has suffered from many issues of late including the loss of an exclusive partnership with Costco Wholesale Corp.
“At the start of 2016 we said we would move with a strong sense of urgency to change the trajectory of our business,” said Chief Executive Kenneth Chenault. ” The results we’re reporting today reflect substantial progress on that commitment.”
CEO Mr. Chenault stated the company is ahead of plans to reset its cost base whilst improving operating efficiency. American Express said last year it would cut around $1 billion in costs. The company reported Q4 expenses which were 2% lower.
Mr. Chenault, acknowledged “we continue to operate in a very challenging environment,”
2017 Earnings estimated at $5.61
Company Expects 2017 Earnings of between $5.60 and $5.80 vs estimates of $5.61.
Reported Q4 profit was $825 million, or 88 cents a share, down from $899 million, or 89 cents a share, a year earlier. Not including restructuring charges, earnings were 91 cents a share, below analyst estimates for 98 cents. Revenue was down 4.4% to $8.02 billion. Not including the impacts of the Costco loss and the stronger dollar, the company reported a top line increase of 6%.
Revenue has recently been in focus because it has fallen short of internal growth targets. Analysts were expected $7.95 billion.