American Express tops 2Q profit forecasts
NEW YORK (AP) — American Express Co.'s second-quarter profits fell 5 percent from a year ago, but the results still solidly beat analysts' estimates. A strong U.S. dollar weighed on the company's international operations once again.
The New York-based company said it earned $1.44 billion after payments to preferred shareholders, down from $1.52 billion the same period a year ago. On a per share basis, AmEx had net income of $1.42 per share.
The results beat Wall Street expectations. The average estimate of 15 analysts surveyed by Zacks Investment Research was for earnings of $1.33 per share.
The credit card issuer and global payments company had revenue of $8.28 billion in the period, missing analyst forecasts. Nine analysts surveyed by Zacks expected $8.39 billion.
The amount of money spent on American Express' namesake cards, which is a closely watched metric for the company, rose in the U.S. but fell sharply internationally. U.S. card member spending rose 6 percent to $144.1 billion, while international spending fell 12 percent to $30 billion.
A stronger dollar makes goods purchased internationally worth less when their local-currency price is converted to dollars. AmEx is particularly exposed to currency fluctuations when U.S. customers buy products internationally when they travel, but their accounts are denominated in dollars.
American Express shares have fallen 15 percent since the beginning of the year, while the Standard & Poor's 500 index has climbed almost 3 percent. The company had a series of bad news earlier this year, when the company lost its exclusive deal with Costco, as well as losing an antitrust suit.
Its shares slipped $1.24, or 1.6 percent, to $77.75 in extended trading following the release of the earnings report.
This story was generated partially by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research.