AmEx Shares Slip Despite Earnings Beat

amex shares

On Wednesday, American Express delivered its third-quarter earnings report. Although the company was able to post earnings beat for the quarter, shares of the company slipped during the after-hours trading after the release of the earnings report.

For the third quarter, the company posted earnings of $1.50 per share beating most analysts estimates of $1.48 per share. American Express also posted a revenue of $8.44 billion beating most estimates of $8.285 billion for the third quarter. During the same quarter last year, American Express posted earnings of $1.20 per share with their revenue coming in at $7.77 billion.

During their second quarter earnings for the year, AmEx shares dipped by 1% despite the company posting an earnings beat. The company posted earnings of $1.47 per share compared to estimates of $1.42 per share. However, the company was able to post a revenue beat of $8.31 billion versus expectations of $8.20 per share for the second quarter.

American Express also announced during its third-quarter earnings call that it would raise its full-year earnings guidance to come at around $5.80 to $5.90 per share. This is higher than analysts forecasts of $5.74 per share for their full-year earnings.

The company’s chief financial officer Jeffrey Campbell stated during their earnings call that they were able to raise their earnings estimates as well as having been able to fund incremental investments that would result in moderate to long term results. He also added that the company is now seeing the payoff in the results of their current year results from having performed strong and consistently during the past three quarters.

American Express shares which jumped by 1.5% during the after-hours trading following the release of the earnings report is now currently trading at around $92.08 per share. AmEX shares have rallied by around 24% since the beginning of the year.

During their second-quarter earnings call, the company announced their plans to further continue with their cost-cutting efforts to push their EPS and net income higher. Campbell has attributed these cost-cutting measures as the reason for their margin getting raised in order to meet their full-year forecasts.

Although these efforts have helped the company’s operating expenses, American Express is currently under the eye of the U.S. Supreme Court due to the possibility of the company violating a federal antitrust law where a number of states have appealed to courts stating that the company must stop sellers or merchants from promoting the use of competitor cards.

The company also announced that chief executive officer Kenneth Chenault would be stepping down from his position after sixteen years and would be replaced by Stephen Squeri.

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