Financial Performance - Total revenues net of interest expense increased to $16,967 million in Q1 2025, up from $15,801 million in Q1 2024, representing a growth of 7.3%[195] - Net income for Q1 2025 was $2,584 million, compared to $2,437 million in Q1 2024, reflecting an increase of 6.0%[199] - Total non-interest revenues rose to $12,798 million in Q1 2025, a 6.4% increase from $12,032 million in Q1 2024[195] - Earnings per share (diluted) increased to $3.64 in Q1 2025 from $3.33 in Q1 2024, representing a growth of 9.3%[195] - Comprehensive income for Q1 2025 was $2,613 million, compared to $2,354 million in Q1 2024, reflecting an increase of 11.0%[199] - Cash dividends declared for common shares were $576 million for the three months ended March 31, 2025, compared to $507 million in the same period of 2024, marking an increase of 13.6%[220] - Total revenues net of interest expense after provisions for credit losses for the three months ended March 31, 2025, were $15,817 million, up from $14,532 million in 2024, an increase of 8.83%[364] - Net income for the three months ended March 31, 2025, was $2,584 million, compared to $2,437 million in 2024, reflecting a growth of 6.04%[360] Assets and Liabilities - Total assets increased to $282,244 million as of March 31, 2025, compared to $271,461 million at the end of 2024, marking a growth of 4.3%[201] - The company’s total equity increased from $30,264 million as of December 31, 2024, to $31,202 million as of March 31, 2025, representing a growth of 3.1%[220] - The total fair value of AFS debt securities was $1.110 billion as of March 31, 2025, down from $1.240 billion as of December 31, 2024[278] - Total financial assets measured at fair value amounted to $1,319 million, compared to $2,246 million as of December 31, 2024, reflecting a decrease of approximately 41.3%[327] - Total liabilities measured at fair value remained constant at $530 million from December 31, 2024, to March 31, 2025[331] Customer Deposits and Loans - The company reported a net increase in customer deposits of $6,973 million in Q1 2025, compared to $5,283 million in Q1 2024[204] - As of March 31, 2025, total customer deposits increased to $146.396 billion from $139.413 billion as of December 31, 2024, representing a growth of approximately 5.1%[294] - Card Member loans decreased slightly to $133,611 million as of March 31, 2025, from $133,995 million at the end of 2024[201] - Card Member loans as of March 31, 2025, totaled $139,203 million, slightly down from $139,674 million as of December 31, 2024, indicating a decrease of 0.3%[221] - The company’s consumer Card Member loans decreased from $107,646 million as of December 31, 2024, to $105,213 million as of March 31, 2025, a decline of 2.3%[221] Credit Losses and Provisions - The company reported reserves for credit losses of $5,592 million for Card Member loans as of March 31, 2025, compared to $5,679 million as of December 31, 2024, showing a reduction of 1.5%[221] - Provisions for credit losses for Card Member loans were $901 million for the three months ended March 31, 2025, compared to $1,014 million for the same period in 2024[267] - The total reserve for credit losses for Other loans increased to $244 million as of March 31, 2025, reflecting growth in Personal Loans and Business Line of Credit offerings[273] - The company established reserves for interest believed to be uncollectible, reflecting a proactive approach to credit risk management[230] Share Repurchase and Dividends - During the three months ended March 31, 2025, the company repurchased a total of 2,270,300 shares at an average price of $297.37 per share[374] - The company has a remaining authorization to repurchase up to 72,900,519 shares under its publicly announced repurchase programs[374] - The company’s Board of Directors authorized the repurchase of up to 120 million common shares on March 8, 2023, replacing the prior authorization[374] Legal Proceedings - The estimated range of possible loss for disclosed legal proceedings is zero to $190 million in excess of any accruals related to those matters[310] - American Express has accrued for certain outstanding legal proceedings, evaluating developments quarterly to adjust the accrual amount as necessary[309] - The company is involved in various legal proceedings, including antitrust claims, which could have a material adverse effect on its business and results of operations[310] Economic Outlook - The U.S. unemployment rate is projected to be between 3% and 8% by the fourth quarter of 2025, indicating potential economic variability[265]

Core Viewpoint - The financial services companies reported positive results despite economic uncertainties, highlighting customer resilience and strong balance sheets [1][12]. Group 1: Deposit Growth and Credit Quality - Deposit bases expanded or remained stable in a competitive rate environment, with KeyCorp showing mid-single-digit growth year over year and Truist increasing balances while reducing deposit costs by 10 basis points [2] - Credit quality remained robust, with KeyCorp's nonperforming assets decreasing nearly 10% from the prior quarter and Truist's provision for credit losses declining sequentially [3] Group 2: Consumer Spending Trends - American Express reported a 6% year-over-year increase in card member spending, with significant growth among Gen Z and millennials, indicating a focus on experiences [4] - Truist's mobile app saw a 31% increase in consumer loans, with Gen Z volumes rising by 47%, reflecting strong demand among younger consumers [5] Group 3: Investment and Capital Plans - Management teams are pursuing capital plans despite macroeconomic uncertainties, with Truist launching real-time payments and achieving double-digit growth in treasury-management revenue [7] - KeyCorp is actively reviewing clients for tariff exposure while maintaining existing capital expenditure projects, and Fifth Third is investing in Southeast branches and national loan-origination platforms [8] Group 4: Contingency Planning - Each institution has contingency plans in place, with KeyCorp setting aside an additional $8 million in loan-loss reserves and Truist trimming certain expenses while continuing to invest in risk management and digital initiatives [9][10] - The common strategy includes maintaining liquidity, tight credit underwriting, and targeted technology investments to either cut costs or expand fee income [10] Group 5: Market Confidence and Preparedness - Confidence among these institutions is bolstered by low unemployment and stable delinquency metrics, alongside a shift towards higher-quality borrowers and fee-based products [11] - American Express noted that 70% of new accounts carry annual fees, while KeyCorp and Truist emphasized the growth of wealth management and treasury businesses [12] Group 6: Overall Sentiment - Despite acknowledging geopolitical and policy risks, the companies expressed optimism about their preparedness and ability to navigate economic uncertainties [12][13]

Financial Performance - Total revenues net of interest expense reached $16.967 billion, a 7% increase compared to Q1'24, or an 8% increase on an FX-adjusted basis[5] - Net income was $2.584 billion, up 6% year-over-year[5] - Diluted EPS increased by 9% to $3.64[5] Billed Business - Total billed business grew by 6% on an FX-adjusted basis[7] - U.S Consumer Services billed business increased by 7% year-over-year, with Millennials and Gen-Z contributing 14% growth[10] - International Card Services billed business saw a 13% increase, driven by a 12% rise in International Consumer and a 13% increase in International SME & Large Corp[14] Revenue Streams - Discount revenue increased by 4% to $8.743 billion[25] - Net card fees grew significantly by 18% to $2.333 billion[25] - Net interest income increased by 11% to $4.169 billion[25] Expenses and Credit Metrics - Total expenses increased by 10% to $12.487 billion, with variable customer engagement expenses accounting for 43% of revenue[40] - The net write-off rate for Card Member Loans was 2.4% in Q1'25[55] - Total provision decreased by 9% versus Q1'24, primarily driven by a net reserve release in the current period versus a net reserve build in the prior period, partially offset by higher net write-offs[67] Loans and Receivables - Worldwide total loans and card member receivables reached $207 billion, a 7% increase year-over-year on an FX-adjusted basis[16] Guidance - The company projects revenue growth of 8% - 10% for 2025[46] - EPS guidance for 2025 is set at $15.00 - $15.50, representing an adjusted EPS growth of 12% - 16%[46]

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 - 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]