American Express Company (NYSE: AXP) is anticipated to post increased revenue and profits for the fourth quarter of fiscal 2024. In the prior year, the credit card leader demonstrated steady financial results, bolstered by a rise in net interest income alongside robust loan volumes, strong cardholder spending, and rapid growth in card fee revenue.
Following a slow start to 2025, the company’s stock gained traction and reached a new high this week. Over the past year, shares have increased significantly by 73%, markedly outperforming the broader market. Though the stock’s current valuation appears elevated after these significant gains, long-term investors may want to keep it on their radar due to the company’s solid fundamentals and bright future prospects.
Estimates
American Express is set to release its fourth-quarter earnings report on January 24, at 7:00 am ET. Analysts remain optimistic about the results, projecting a 16% year-over-year increase in adjusted profit to $3.03 per share. This positive expectation is accompanied by an estimated 9% rise in revenues to $17.18 billion for the December quarter.
Recent statements from Amex management have indicated an increase in their full-year earnings guidance to a range of $13.75 to $14.05 per share, up from the earlier estimate of $13.30-$13.80 per share. The company is forecasting a 9% revenue growth for FY24 and has successfully refreshed 40 products globally, with plans for further refreshes by the year’s end.
Earnings Growth
In the third quarter, adjusted earnings rose 6% year-over-year to $3.49 per share, with reported net income at $2.51 billion, compared to the previous year’s $2.45 billion or $3.30 per share. For the September quarter, revenue (net of interest expense) increased by 8% to $16.6 billion. While the earnings surpassed Wall Street’s predictions, revenues fell short—continuing a trend seen over recent quarters.
Key takeaway from American Express’ Q3 2024 earnings call:
“…Our emphasis on premium products remains central to our robust credit performance. We are managing our expenses carefully. Year to date, excluding gains from our Accertify acquisition, operating expenses have seen modest growth as we leverage the scale and digitization of our operations fully. This business model is generating strong earnings, allowing us to increase investments to expand our franchise and return excess capital to our shareholders.”
Spending Trends
Small businesses, crucial to Amex’s operations, have recently reduced spending on a same-store basis compared to the post-COVID period due to economic uncertainty. However, despite general pressures on consumer spending, the company’s high-income cardholders continue to spend on discretionary items such as travel and dining. The strong card-member base is favorable for the company, considering that a large portion of revenue is derived from card member fees.
On Friday, AXP saw slight gains during the early hours of trading, remaining well above its 52-week average price. Over the past six months, the stock value has risen by over 25%.
