Financial Data and Key Metrics Changes - The company reported revenues of $17 billion, an increase of 8% year-over-year on an FX adjusted basis, or 9% excluding the leap year impact [7] - Net income was $2.6 billion, translating to $3.64 per share [7] - Total card member spending grew by 6% in the quarter, or 7% excluding the leap year impact [7] Business Line Data and Key Metrics Changes - Card fee growth was up 20% on an FX adjusted basis, with retention remaining high and excellent credit performance [9] - Total billed business increased by approximately 7.5% year-over-year, with goods and services spending growing at a faster pace than in 2024 [20] - Commercial services spend was up 3% year-over-year, consistent with previous trends [22] Market Data and Key Metrics Changes - International card services spend increased by 14%, with strong growth across all top five markets [23] - U.S. SME spending at wholesale merchants saw a modest acceleration, possibly due to higher purchases in anticipation of price increases [22] Company Strategy and Development Direction - The company aims to maintain full-year revenue growth guidance of 8% to 10% and EPS of $15 to $15.50% [10] - The focus is on long-term growth for shareholders, with a commitment to enhancing products and services for customers [15] - The company is investing strategically in technology and customer acquisition to strengthen foundational capabilities [15] Management's Comments on Operating Environment and Future Outlook - Management noted that spending levels have remained consistent with Q1 trends, despite increased macroeconomic uncertainty [10] - The company is confident in its ability to navigate various economic environments due to its resilient business model [10] - Management emphasized the importance of maintaining investment in long-term projects, even in uncertain times [74] Other Important Information - The CET1 ratio was reported at 10.7%, within the target range of 10% to 11% [34] - The company returned $1.3 billion of capital to shareholders, including a 17% increase in dividends [34][77] Q&A Session Summary Question: Has there been any indication of spending pull forward? - Management stated there has been no significant pull forward in spending, with consistent consumer behavior observed [45][46] Question: Which segments would be under pressure from potential tariffs? - Small businesses are expected to be the most impacted, with ongoing risk management efforts in place [54][56] Question: Can you discuss card refresh and fee growth? - The company remains committed to product refreshes and will raise fees only when value is added [60][62] Question: How is the company looking at capital management? - The company aims to return about 80% of earnings to shareholders while continuing to invest in long-term projects [68][70] Question: How does the company view the impact of unemployment on spending? - Management feels comfortable with the guidance despite a higher unemployment rate, focusing on white-collar unemployment as a key driver [85][86] Question: Are there any concerns regarding the Millennial and Gen-Z cohorts? - Spending growth for these cohorts remains strong, with delinquency rates lower than industry averages [91][93] Question: What is the status of the SME technology integration? - The integration of various platforms is ongoing, with the aim of creating a cohesive ecosystem for SME customers [137][139]

Earnings Performance - American Express reported quarterly earnings of $3.64 per share, exceeding the Zacks Consensus Estimate of $3.45 per share, and up from $3.33 per share a year ago, representing an earnings surprise of 5.51% [1] - The company posted revenues of $16.97 billion for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.18%, compared to $15.8 billion in the same quarter last year [2] Stock Performance - American Express shares have declined approximately 14.8% since the beginning of the year, while the S&P 500 has decreased by 10.3% [3] - The current Zacks Rank for American Express is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $3.89 on revenues of $17.74 billion, and for the current fiscal year, it is $15.21 on revenues of $71.5 billion [7] - The outlook for the Financial - Miscellaneous Services industry, which includes American Express, is currently in the top 31% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8]

Group 1 - The core viewpoint of the article highlights that American Express reported a first-quarter revenue of $17 billion, reflecting a year-over-year growth of 7% [1] - The company adjusted its earnings per share to $3.64, which represents a 9% increase compared to the previous year [1] - American Express has maintained its full-year revenue and earnings per share guidance unchanged [1]

Financial Performance - Total non-interest revenues for Q1'25 were $12,798 million, a 6% increase year-over-year compared to $12,032 million in Q1'24[1] - Net income for Q1'25 reached $2,584 million, reflecting a 6% increase from $2,437 million in Q1'24[1] - Total consolidated revenues for Q1'25 reached $16,967 million, a 7% increase from Q1'24's $15,801 million[13] - Non-interest revenues in Q1'25 were $12,798 million, up 6% from $12,032 million in Q1'24[13] - The net interest income for U.S. Consumer Services in Q1'25 was $3,006 million, reflecting a 10% increase from $2,733 million in Q1'24[15] - Net interest income increased by 30% to $770 million compared to Q1'24[16] - Total revenues net of interest expense reached $4,035 million, up 7% from the previous year[16] - International Card Services reported non-interest revenues of $2,646 million, a 9% increase year-over-year[17] - Total revenues net of interest expense for International Card Services were $2,936 million, an 8% increase from Q1'24[17] Assets and Loans - Card Member loans, less reserves, increased by 10% year-over-year to $133,611 million in Q1'25 from $121,348 million in Q1'24[3] - Total assets grew by 5% year-over-year to $282,244 million in Q1'25, up from $269,261 million in Q1'24[3] - Card Member loans totaled $139,203 million in Q1'25, marking a 10% increase from $126,619 million in Q1'24[9] - Total loans increased by 13% to $31,240 million compared to Q1'24[16] - Average Card Member loans reached $138,457 million in Q1'25, up from $124,720 million in Q1'24, representing an increase of 11%[21] Expenses and Provisions - Total expenses for Q1'25 were $12,487 million, a 10% increase compared to $11,387 million in Q1'24[1] - Total provisions for credit losses decreased by 9% year-over-year to $1,150 million in Q1'25 from $1,269 million in Q1'24[1] - Total provisions for credit losses decreased by 7% to $329 million year-over-year[16] - Total provisions for credit losses in International Card Services were $192 million, a 5% increase compared to the previous year[17] - Total provisions for credit losses were $2 million in Q1'25, compared to $6 million in Q1'24, indicating a significant improvement[18] Shareholder Returns - Cash dividends declared per common share increased by 17% to $0.82 in Q1'25 from $0.70 in Q1'24[1] - Return on average equity for Q1'25 was 33.6%, slightly down from 34.3% in Q1'24[3] - The company reported a pretax segment income of $990 million in Q1'25, down 3% from $1,017 million in Q1'24[18] - Net income for Q1'25 was impacted by $18 million allocated to participating share awards and $14 million in preferred share dividends[15] Card Member Metrics - Network volumes for Q1'25 reached $439.6 billion, a 5% year-over-year increase from $419.2 billion in Q1'24[5] - Billed business in Q1'25 was $387.4 billion, reflecting a 6% increase compared to $367.0 billion in Q1'24[5] - The average fee per card rose to $111 in Q1'25, a 13% increase from $98 in Q1'24[5] - Proprietary new cards acquired in Q1'25 were 3.4 million, consistent with Q1'24[5] - The number of proprietary cards-in-force increased by 5% year-over-year, reaching 46.8 million in Q1'25[15] - Average proprietary basic Card Member spending was $5,014 in Q1'25, a 1% increase from $4,962 in Q1'24[15] Credit Quality - The net write-off rate for Card Member loans was 2.4% in Q1'25, up from 2.3% in Q1'24[9] - The net write-off rate for principal and fees was 0.8% in Q1'25, down from 1.5% in Q1'24[15] - Credit loss reserves for other loans ended at $244 million in Q1'25, a 79% increase from $136 million in Q1'24[11] - The reserve as a percentage of Card Member loans was 4.0% in Q1'25, slightly down from 4.2% in Q1'24[9] Interest Income and Yield - Interest income rose to $1,202 million in Q1'25, reflecting a 20% year-over-year growth[16] - Net interest yield on average Card Member loans was 12.2% in Q1'25, consistent with 12.2% in Q1'24[21] - Interest expense primarily represents costs associated with maintaining the corporate liquidity pool and funding Card Member receivables[15] - Interest income is primarily derived from Other loans, interest-bearing deposits, and fixed income investment portfolios[15]

Core Viewpoint - Berkshire Hathaway's asset composition has shifted, with controlled companies now exceeding public equity holdings, and cash and marketable securities surpassing stock investments [1] Company Overview - American Express remains a significant holding for Berkshire Hathaway, constituting 14.5% of its equity portfolio, second only to Apple [2] - The company has consistently outperformed the market over the long term, although it has underperformed the S&P 500 and Nasdaq Composite year to date [2] Business Model - American Express operates a unique business model compared to Visa and Mastercard, issuing its own cards and bearing the risk of defaults [4][7] - The company targets affluent customers, which allows for higher fees and greater spending potential, despite the inherent risks [7][8] Financial Performance - American Express has shown steady revenue and earnings growth, with a notable increase post-pandemic as it appeals to younger demographics [9] - The stock has declined 22.9% from its all-time high, presenting a potential buying opportunity for long-term investors [13] Valuation Metrics - The current price-to-earnings (P/E) ratio for American Express is 17.9, slightly below its five-year average of 18.4, indicating it may be undervalued [13] - The price-to-free cash flow ratio stands at 14.8, further suggesting that American Express is a good value [13] Share Buybacks - American Express has reduced its share count by 30% over the last decade, enhancing earnings per share (EPS) growth through buybacks [15][17] - The company has a history of significant dividend increases, with a recent 17% hike in its quarterly payout [17] Investment Thesis - American Express exemplifies quality over quantity in the payment processing sector, with affluent customers leading to higher average spending [19] - The stock is considered a strong buy amid broader market sell-offs, offering both value and passive income potential [20]

Core Viewpoint - American Express Company (AXP) is expected to report first-quarter 2025 results on April 17, 2025, with earnings estimated at $3.46 per share and revenues of $17 billion, reflecting year-over-year growth in both metrics [1][2]. Earnings Estimates - The Zacks Consensus Estimate for first-quarter earnings indicates a year-over-year increase of 3.9%, while revenues are projected to grow by 7.6% [2]. - For the current year, the revenue estimate stands at $71.5 billion, implying an 8.4% rise year-over-year, and the EPS estimate is $15.24, suggesting a 14.2% increase [3]. Recent Performance - American Express has consistently beaten consensus earnings estimates in the last four quarters, with an average surprise of 6.9% [3]. Earnings Prediction Model - Current indicators suggest uncertainty regarding an earnings beat, with an Earnings ESP of -0.40% and a Zacks Rank of 3 (Hold) [4]. Factors Influencing Q1 Results - A rise in network volumes is anticipated, driven by resilient consumer spending among AXP's premium customer base, with a projected 6.1% year-over-year growth in total network volumes [6]. - Discount revenues are expected to grow by 5% year-over-year, supported by increased network volumes [7]. - Growth in cards-in-force is projected at 4.5% year-over-year, with Average Card Member loans expected to rise by 10.6% [8]. - Interest income is likely to increase by 5.2% from the previous year, reflecting higher loan receivables [9]. Expense Considerations - Rising expenses in card member services, marketing, and salaries may limit margin growth, with increased client engagement costs anticipated due to higher spending and travel-related benefits [10]. - Pre-tax income from Global Merchant and Network Services is expected to decline by 3%, and U.S. Consumer Services is projected to fall by 5.4% year-over-year, adding to the uncertainty of an earnings beat [11]. Stock Performance and Valuation - AXP's stock has declined by 13.9% year-to-date, outperforming the industry's decline of 18.5% [12]. - Currently, AXP trades at 16.08X forward 12-month earnings, above the industry average of 13.97X, indicating it may be overvalued compared to its peers [15]. Market Context - The company operates in a different model compared to Visa and Mastercard, taking on full credit risk while serving an affluent customer base [17]. - Expectations of rate cuts could impact banking margins but may also boost consumer spending and swipe fee revenue [18]. - Near-term challenges include rising expenses and greater exposure to U.S. economic shifts compared to global competitors [19]. Investor Sentiment - Steady operations and customer resilience are seen as positive for current shareholders, while new investors may consider waiting for a more favorable entry point due to potential regulatory changes and spending shifts [20].

Core Viewpoint - Analysts forecast that American Express (AXP) will report quarterly earnings of $3.46 per share, reflecting a year-over-year increase of 3.9%, with anticipated revenues of $17 billion, marking a 7.6% increase compared to the previous year [1] Earnings Estimates - Over the last 30 days, there has been a downward revision of 0.2% in the consensus EPS estimate for the quarter, indicating a collective reconsideration by analysts [2] - Revisions to earnings projections are crucial for predicting investor behavior, as empirical studies show a strong correlation between earnings estimate trends and short-term stock performance [3] Key Metrics Forecast - Analysts estimate 'Commercial Services - Card Member Loans - Total loans' at $31.20 billion, up from $27.6 billion year-over-year [5] - The forecast for 'International Card Services - Card Member loans - consumer and small business - Average loans' is $17.96 billion, compared to $16.4 billion last year [6] - 'U.S. Consumer Services - Card Member loans - Total loans' is expected to reach $89.44 billion, an increase from $82.3 billion in the same quarter last year [7] - The average prediction for 'Average Card Member loans' is $137.87 billion, up from $124.7 billion year-over-year [8] - The consensus estimate for 'Total non-interest revenues' stands at $12.83 billion, compared to $12.03 billion in the same quarter last year [9] - Analysts project 'Net Interest Income' to reach $4.11 billion, an increase from $3.77 billion last year [10] Stock Performance - Shares of American Express have decreased by 5.5% over the past month, compared to a 3.6% decline in the Zacks S&P 500 composite, with a Zacks Rank of 3 (Hold) indicating expected performance in line with the overall market [11]

Market Overview - The stock market has experienced significant volatility, with the S&P 500 index rising over 10% on April 9 due to a tariff pause announcement by the Trump administration, but subsequently falling the next day [1][2] American Express - American Express has a strong brand presence and focuses on affluent customers, leading to steady revenue growth, with over half of its revenue derived from credit card swipe fees [3] - The company has successfully acquired 12.2 million and 13 million net new cardholders in 2023 and 2024, respectively, with an average spend per cardmember of nearly $25,000 [4] - Despite potential earnings challenges during a recession in 2025, American Express is well-positioned due to its affluent customer base, which showed resilience during the inflation scare of 2022 [5] - The management is committed to growing dividends and repurchasing stock, with a long-term revenue growth target of 10% per year and even faster earnings per share growth [6] Visa - Visa operates as a payments network for banks and does not issue credit cards, which has allowed it to become a major player in global payment transactions, with 4.7 billion cards in circulation [7] - The company may face reduced spending during a recession, but is expected to grow with inflation and the shift towards digital payments, reporting a 9% year-over-year growth in total payments volume [8] - Visa has impressive operating margins of 66% and has seen its earnings per share grow by 317% over the past decade, with expectations for continued growth [9] - Currently, Visa trades at a high trailing price-to-earnings ratio of 33.5, making it less attractive as an entry point, but it remains a stock to watch for potential future buying opportunities [10]

Core Viewpoint - The current market downturn presents a valuable buying opportunity for American Express, particularly for long-term investors despite potential challenges in 2025 due to tariffs [2][11]. Company Overview - American Express is one of the largest credit card issuers in the U.S., with approximately 146.5 million cards in circulation by the end of 2024 [3]. - The company has a unique business model, with 66% of its revenue derived from credit card swipe fees and customer fees rather than net interest income [4]. Customer Base and Performance - American Express serves a wealthier customer base, with an average spending of $25,000 per card member in 2024 and write-off rates below 2% in Q4 2024, positioning it favorably during economic downturns [5]. Capital Returns - The company has a strong track record of returning capital to shareholders, with a 110% increase in dividends over the last decade and significant share repurchases totaling $5.4 billion in 2024 [6][7]. - The reduction in shares outstanding by 21% over the past 10 years enhances shareholder value through increased ownership stakes and EPS growth [7]. Stock Valuation - The current forward price-to-earnings (P/E) ratio for American Express is 15, down from over 20 at the beginning of the year, indicating a significant discount for investors [9][10]. - Management anticipates long-term revenue growth of over 10% annually, which could lead to continued declines in the P/E ratio as the stock price stabilizes [10].

Group 1: Upcoming Earnings Reports - Major banks such as Goldman Sachs, Citigroup, and Bank of America are set to report earnings next week, with Goldman Sachs expected to perform well due to management confidence and downsizing efforts [1][2] - Citigroup's stock is anticipated to gain regardless of quarterly performance, while Bank of America is expected to post decent earnings based on recent trends [3] - Johnson & Johnson's earnings report will be closely watched for updates on ongoing litigation and potential news about new drugs, which could positively impact its stock [4] Group 2: Other Notable Earnings - Abbott Laboratories is expected to show strength in its franchises but may also address ongoing lawsuits affecting its stock [5] - Taiwan Semiconductor, UnitedHealth, and American Express will report earnings on Thursday, with UnitedHealth being labeled a "universal buy" and American Express expected to have a strong quarter despite potential post-report trading issues [7] - Netflix's earnings call is anticipated to highlight its ad-tier subscription model, although external factors such as political drama may overshadow its news [8] Group 3: Economic Indicators - Retail sales data will be released on Wednesday, with expectations of strong numbers based on positive signals from major retailers like Walmart, Amazon, and Costco [6]