Post Earnings Coverage as American Express' Sales Topped Market Estimates
ACCESS Newswire
Upcoming AWS Coverage on Capital One Financial Post-Earnings Results
LONDON, UK / ACCESSWIRE / January 23, 2017 / Active Wall St. announces its post-earnings coverage on American Express Co. (NYSE: AXP). The Company disclosed its fourth quarter and fiscal 2016 results on January 19, 2017. The credit card Company's earnings came in below expectations; however, revenue beat market estimates. Register with us now for your free membership at:
One of American Express' competitors within the Credit Services space, Capital One Financial Corp. (NYSE: COF), announced on January 14, 2017, that it will release its Q4 2016 earnings results on Tuesday, January 24, 2017, at approximately 4:05 p.m. ET. Moreover, the Company will host a conference call at 5:00 p.m. ET to review financial and operating performance for the quarter ending December 31, 2016. AWS will be initiating a research report on Capital One in the coming days.
Today, AWS is promoting its earnings coverage on AXP; touching on COF. Get our free coverage by signing up to:
For the three months ended on December 31, 2016, American Express reported consolidated total revenues, net of interest expense of $8.0 billion, down 4% compared to revenue of $8.4 billion in the year ago same period. The Company stated that excluding previous year's Costco-related business and the effect of foreign exchange rates due to the impact of a stronger US dollar on international operations during Q4 2016, adjusted revenues net of interest expense increased 6%.
For FY16, American Express' revenues net of interest expense declined 2% to $32.1 billion from $32.8 billion in FY15.
American Express reported Q4 2016 diluted earnings per share of $0.88, down 1% compared to Q4 2015 diluted earnings per share of $0.89. Excluding a restructuring charge related to cost reduction efforts, adjusted diluted earnings per share was $0.91 for the reported quarter. The Company's Q4 2016 net income was $825 million, down 8% from $899 million a year ago. Analysts were expecting earnings of $0.98 per share on revenue of $7.9 billion.
For FY16, American Express reported net income of $5.4 billion, up 5% from $5.2 billion a year ago. Diluted earnings per share were $5.65 compared to $5.05 a year ago. Excluding restructuring charges related to cost reduction efforts, adjusted diluted earnings per share was $5.93.2, within the company's 2016 guidance range.
Segment Results
During Q4 2016, American Express' US Consumer Services segment reported net income of $351 million, down 35% from $541 million a year ago. The year-ago period included Costco-related revenues, provisions, and expenses. For the segment total revenues net of interest expense decreased 10% to $3.0 billion from $3.4 billion in the year earlier same period. Provisions for losses for the Consumer Services segment totaled $363 million in Q4 2016, up 9% from $334 million a year ago. The increase primarily reflected higher loan growth and a slight increase in both lending delinquency and net write-off rates.
For Q4 2016, American Express' International Consumer and Network Services net income tumbled 40% to $84 million from $140 million a year ago, primarily reflecting higher investment spending on growth initiatives. The segment's total revenues net of interest expense was $1.4 billion, up 2% (up 7% on constant currency) from a year ago. The increase primarily reflected higher Card Member spending. During Q4 2016, International Consumer and Network Services' provisions for losses totaled $92 million, up 19% from $77 million a year ago, reflecting a slight increase in lending net write-off rates.
During the reported quarter, the Company's Global Commercial Services net income declined 22% to $382 million from $487 million a year ago. The year ago comparable period included Costco-related revenues, provisions, and expenses. American Express' total revenues net of interest expense were $2.5 billion, higher by 1% from Q4 2015, reflecting higher Card Member spending.
American Express' Global Merchant Services reported Q4 2016 net income of $369 million, up 1% from $364 million a year ago. Total revenues net of interest expense was $1.1 billion, down 7% from $1.2 billion a year ago. The year-ago same period included Costco-related revenues.
American Express' Corporate and Other reported Q4 2016 net loss of $361 million compared to net loss of $633 million a year ago.
Cash Flow & Balance Sheet
American Express repurchased $1 billion worth of shares in Q4 2016, and reported that its share count dropped by 7% versus the prior year. For FY16, the Company returned 99% of the capital it generated to shareholders in the form of dividends and buybacks.
Outlook
For FY17, the Company expects earnings per share to be between $5.60 and $5.80.
Stock Performance
At the closing bell, on Friday, January 20, 2017, the stock closed the trading session at $76.20, marginally slipping 0.64% from its previous closing price of $76.69. A total volume of 8.46 million shares have exchanged hands, which was higher than the 3-month average volume of 4.82 million shares. American Express's stock price surged 24.94% in the last three months, 21.25% in the past six months, and 24.00% in the previous twelve months. Moreover, the stock gained 3.30% since the start of the year. The Company's shares are trading at a PE ratio of 13.49 and have a dividend yield of 1.68%.
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