Payment card company American Express released its quarterly earnings on Friday, reporting record revenue. However, this still wasn’t enough for its shares to stop sliding as investors showed concern about the company’s unchanged annual forecast and the decision to set money aside for possible defaults.
AmEx had revenue of $14.28 billion, a significant increase from $11.74 billion in the same period of the last year. Also, the spending by cardholders came to $426.6 billion, representing an 8% increase.
On a less-positive note, the company’s earnings of $2.40 a share were below analysts’ estimation of $2.66 earnings per share. The company remained conservative in its 2023 forecast, reiterating 15% to 17% growth and $11 to $11.40 earnings per share. On top of that, AmEx raised its provisions for credit losses to $1.2 billion compared to $410 million in 2022.
The company’s shares traded at $178.90 in after-hours market on Thursday before plunging as low as $168.03 on Friday morning. AmEx stock is still 15.71% up year-to-date.
“Our customers have been resilient thus far in the face of slower macroeconomic growth, elevated inflation, and higher interest rates, with credit performance remaining best-in-class,” AmEx CEO Stephen J. Squeri said in the release. “That said, we’re mindful of the mixed signals in the external environment.”