Business at the US payment service provider American Express is booming. In the past fourth quarter, the US group impressed with a jump in sales and profits. By Annika Kintscher
Despite the new corona wave caused by the Omikron variant, business at American Express continues to run smoothly. In the fourth quarter, sales rose 30 percent year-on-year to $12.1 billion (€10.7 billion), as the US financial group announced on Tuesday. “We delivered strong fourth quarter and full year results that exceeded our expectations,” said Chief Executive Officer Stephen J. Squeri.
And the numbers are impressive: the bottom line is that American Express earned $1.7 billion, 20 percent more than a year ago. Although Omikron led to new lockdowns in some countries and messed up many travel plans in the Christmas quarter, the payment volume of the group’s credit card customers increased surprisingly sharply. The under-50s in particular spent money in restaurants and on international travel, which is slowly becoming possible again thanks to corona vaccinations. For the full fiscal year 2021, revenue increased 17 percent to $42.4 billion. Profit increased from $3.1 billion to $8.1 billion.
Expectations exceeded, dividend increased
The quarterly figures significantly exceeded analysts’ expectations. American Express also raised its sales targets for the current financial year: The US group expects the trend to continue and anticipates sales growth of 18 to 20 percent in the current year. Earnings per share are expected to be between $9.25 and $9.65.
In addition, the payment service provider wants to increase the quarterly dividend for the first time since 2019: shareholders are to receive a quarterly dividend of 52 cents per share from the first quarter, which corresponds to an increase of around 20 percent.
Our take on American Express stock
The quarterly figures were well received by investors. The shares already reacted clearly before the market: the share is currently listed at 142 euros – more than four percent up. The paper is still a good ten percent away from the all-time high of EUR 162 from mid-November 2021. The Q4 figures are convincing, the trend is right: We recommend buying the share.
dpa-AFX / ak