Core Insights - Young consumers, particularly millennials and Generation Z, are significantly contributing to the growth in credit card spending, especially for American Express, which reported double-digit increases in spending from these demographics in Q4 [1] Group 1: Financial Performance - American Express reported total billed business of $376.7 billion, reflecting an 8% year-over-year increase on an FX-adjusted basis, although this growth was slightly below the 9% increase in overall U.S. consumer spending [2] - Spending by millennials and Gen Z accounted for 34% of U.S. consumer spending, with a notable increase of 16%, while older cohorts saw mid-single-digit percentage growth [3] - Commercial spending also grew, with a 4% year-over-year increase in Q4, and spending by U.S. small- to medium-sized businesses (SMBs) rose by 3%, while large and global businesses increased spending by 7% [3] Group 2: Market Trends and Consumer Behavior - CEO Steve Squeri highlighted that the growth in billings was supported by robust holiday spending and expressed confidence in attracting new premium customers, particularly from younger demographics and small businesses [4] - Fee-based consumer premium cards are experiencing rapid growth, with American Express holding a 25% market share in this segment, which is particularly favored by younger consumers [5] - The CFO noted that spending was broad-based across various sectors, including travel, entertainment, goods, and services, with total loans and card member receivables increasing by 9% [6] Group 3: Credit Performance and Economic Outlook - American Express reported stable credit performance, with net write-off rates of card receivables at 1.9% in Q4, down from 2.1% at the beginning of the year and 2.2% pre-pandemic [6] - Delinquency rates remained stable at 1.3%, consistent with the previous year and lower than pre-pandemic levels [6] - Squeri noted that travel spending has accelerated alongside consumer confidence, indicating a positive outlook for both consumer and small business confidence [7]

Financial Data and Key Metrics - The discussion contains forward-looking statements about the company's future business and financial performance, based on management's current expectations, which are subject to risks and uncertainties [3] - The discussion includes non-GAAP financial measures, with comparable GAAP financial measures available in the earnings materials posted on the company's website [4][5] Business Line Data and Key Metrics - No specific data or metrics related to individual business lines were provided in the content Market Data and Key Metrics - No specific data or metrics related to individual markets were provided in the content Company Strategy and Industry Competition - No specific details on company strategy or industry competition were provided in the content Management Commentary on Operating Environment and Future Outlook - The discussion contains forward-looking statements about the company's future business and financial performance, indicating management's expectations for future performance [3] Other Important Information - Factors that could cause actual results to differ materially from forward-looking statements are included in the presentation slides and SEC reports [4] - All earnings materials, including GAAP financial measures, are available on the company's website [5] Q&A Session Summary - No Q&A session details were provided in the content

Market Overview - The S&P 500 reached a new all-time closing high, while the Nasdaq has led major indexes over the past week but lags over the past month [1] - Currently, major indexes are experiencing declines, with the Dow down by 118 points, S&P down by 10 points, Nasdaq down by 31 points, and Russell 2000 down by 5 points [2] Q4 Earnings Results - American Express (AXP) reported Q4 earnings of $3.04 per share, beating expectations by a penny, with revenues of $17.18 billion, slightly above consensus [3] - Verizon (VZ) also exceeded Q4 earnings expectations with $1.10 per share, and revenues of $35.68 billion, which was 0.79% above consensus [4] Economic Indicators - S&P flash Services PMI for January is expected to be 56.5, indicating growth but slightly below the previous month's 56.8 [5] - Existing Home Sales for December are projected to increase to 4.2 million from 4.15 million, indicating resilience in the housing market despite high mortgage rates [6] - Consumer Sentiment for January is expected to remain flat at 73.2, still below last year's April highs but showing potential for improvement due to recent market optimism [7]

Core Viewpoint - American Express reported strong financial results for the quarter ended December 2024, with revenue and earnings per share exceeding expectations, indicating solid underlying performance and potential for future growth [1][2]. Financial Performance - Revenue for the quarter was $17.18 billion, reflecting an 8.7% increase year-over-year [1]. - Earnings per share (EPS) reached $3.04, up from $2.62 in the same quarter last year, surpassing the consensus estimate of $3.03 by 0.33% [1]. - The revenue matched the Zacks Consensus Estimate, resulting in a surprise of +0.01% [1]. Key Metrics - Book value per common share was reported at $40.88, slightly below the average estimate of $41.49 [4]. - Total Card Member loans amounted to $139.67 billion, slightly below the average estimate of $140.03 billion [4]. - Card billed business (Network volumes) reached $464 billion, exceeding the average estimate of $458.67 billion [4]. - Total Interest Income was $6.08 billion, compared to the average estimate of $6.19 billion [4]. - Total non-interest revenues were $13.14 billion, slightly above the average estimate of $13.07 billion [4]. - Net Interest Income was reported at $4.04 billion, below the average estimate of $4.12 billion [4]. - Discount revenue was $9.18 billion, slightly above the average estimate of $9.11 billion [4]. - Net card fees totaled $2.25 billion, slightly below the average estimate of $2.26 billion [4]. Stock Performance - Shares of American Express have returned +7.2% over the past month, outperforming the Zacks S&P 500 composite's +2.5% change [3]. - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3].

American Express Earnings Conference Call Q4'24 JANUARY 24, 2025 Summary Financial Performance ($ in millions; except per share amounts) | | Q4'24 | YoY% Inc/(Dec) | FY'24 | YoY% Inc/(Dec) | | --- | --- | --- | --- | --- | | Total Revenues Net of Interest Expense | $17,179 | 9% | $65,949 | 9% | | FX-Adjusted* | | 10% | | 10% | | Net Income | $2,170 | 12% | $10,129 | 21% | | Diluted EPS** | $3.04 | 16% | $14.01 | 25% | | Adjusted EPS*** | | | $13.35 | 19% | | Average Diluted Shares Outstanding | 704 | (3%) | ...

分组1 - American Express reported quarterly earnings of $3.04 per share, exceeding the Zacks Consensus Estimate of $3.03 per share, and up from $2.62 per share a year ago, representing an earnings surprise of 0.33% [1] - The company achieved revenues of $17.18 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.01%, and an increase from $15.8 billion year-over-year [2] - American Express has outperformed the S&P 500, with shares increasing approximately 9.8% since the beginning of the year compared to the S&P 500's gain of 4% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $3.60 on revenues of $17.02 billion, and for the current fiscal year, it is $15.24 on revenues of $71.48 billion [7] - The Zacks Industry Rank for Financial - Miscellaneous Services is in the top 38% of over 250 Zacks industries, indicating that the industry outlook can significantly impact stock performance [8]

Revenue and Income Growth - Total revenues net of interest expense increased by 9% YoY to $17.179 billion in Q4'24, driven by growth in non-interest revenues and interest income[1] - Net income attributable to common shareholders rose 12% YoY to $2.139 billion in Q4'24, with diluted EPS increasing 16% to $3.04[1] - Total revenues net of interest expense after provisions for credit losses rose by 14% YoY in the U.S. Consumer Services segment, amounting to $7,468 million in Q4'24[14] - Non-interest revenues increased by 11% YoY to $5,314 million in Q4'24, contributing to a total of $20,137 million for FY'24, up 9% from FY'23[16] - Net interest income grew by 12% YoY to $2,938 million in Q4'24, with FY'24 total reaching $11,290 million, a 17% increase from FY'23[16] - Total revenues net of interest expense rose by 12% YoY to $8,252 million in Q4'24, with FY'24 total at $31,427 million, up 12% from FY'23[16] - Non-interest revenues increased by 4% YoY to $3,388 million in Q4'24, with FY'24 total reaching $13,219 million, up 2% from FY'23[17] - Net interest income grew by 35% YoY to $734 million in Q4'24, with FY'24 total at $2,640 million, a 43% increase from FY'23[17] - Total revenues net of interest expense rose by 8% YoY to $4,122 million in Q4'24, with FY'24 total at $15,859 million, up 7% from FY'23[17] - Non-interest revenues for Q4'24 increased by 11% YoY to $2,725 million, with FY'24 reaching $10,369 million, a 9% increase from FY'23[18] - Net interest income for Q4'24 rose by 17% YoY to $265 million, with FY'24 totaling $1,092 million, a 14% increase from FY'23[18] - Annualized Net Income for Q4'24 was $10,129 million, with a Return on Average Equity (ROE) of 34.6%[21] - Net Interest Income for Q4'24 was $4,038 million, with a Net Interest Yield on Average Card Member Loans of 11.8%[23] - U.S. Consumer Services Net Interest Income for Q4'24 was $2,938 million, with a Net Interest Yield of 12.7%[23] - Commercial Services Net Interest Income for Q4'24 was $734 million, with a Net Interest Yield of 11.1%[23] - International Card Services Net Interest Income for Q4'24 was $265 million, with a Net Interest Yield of 8.7%[23] - Adjusted Net Interest Income for FY'24 was $15,543 million, compared to $13,181 million in FY'23[23] Card Member Loans and Spending - Card Member loans grew 11% YoY to $133.995 billion in Q4'24, reflecting strong customer acquisition and spending[2] - Card Member loans increased to $139.674 billion in Q4'24, an 11% year-over-year growth[6] - Total Card Member loans increased by 11% YoY to $139,674 million in Q4'24[10] - Average proprietary basic Card Member spending in Q4'24 was $6,378, up 3% year-over-year[6] - Average proprietary basic Card Member spending for Q4'24 rose by 6% YoY to $6,003, with FY'24 reaching $22,965, a 7% increase from FY'23[18] - Average Card Member Loans for U.S. Consumer Services in Q4'24 were $89,178 million, up from $80,304 million in Q4'23[23] - Average Card Member Loans for Commercial Services in Q4'24 were $30,392 million, up from $25,608 million in Q4'23[23] - Average Card Member Loans for International Card Services in Q4'24 were $17,591 million, up from $15,862 million in Q4'23[23] Credit Quality and Provisions - Total provisions for credit losses decreased 10% YoY to $1.292 billion in Q4'24, reflecting improved credit quality[1] - Net write-off rate (principal, interest, and fees) for Card Member loans remained stable at 2.2% in Q4'24, consistent with Q4'23[10] - Credit loss reserves for Card Member loans grew by 11% YoY to $5,679 million in Q4'24[10] - Total other loans surged by 30% YoY to $9,232 million in Q4'24[12] - Credit loss reserves for other loans increased by 54% YoY to $194 million in Q4'24[12] - Net write-offs for other loans rose by 56% YoY to $53 million in Q4'24[12] - Total other receivables decreased by 2% YoY to $3,587 million in Q4'24[12] - Credit loss reserves for other receivables remained unchanged at $27 million in Q4'24 compared to Q4'23[12] - Net write-offs for other receivables increased by 75% YoY to $28 million in Q4'24[12] - Net write-off rate (principal, interest, and fees) remained stable at 2.6% in Q4'24, with FY'24 average at 2.7%, compared to 2.2% in FY'23[16] - Net write-off rate (principal, interest, and fees) increased to 2.7% in Q4'24, compared to 2.0% in FY'23[17] - Net write-off rate (principal only) for small business improved to 1.6% in Q4'24, down from 2.0% in Q4'23[17] - 30+ days past due as a % of total for small business decreased to 1.3% in Q4'24, down from 1.5% in Q4'23[17] - Net write-off rate (principal and fees) for Q4'24 decreased to 1.3%, with FY'24 reaching 1.4%, a decrease from 2.1% in FY'23[18] Expenses and Costs - Card Member rewards expenses increased 15% YoY to $4.430 billion in Q4'24, driven by higher customer spending[1] - Marketing expenses rose 31% YoY to $1.614 billion in Q4'24, supporting business growth initiatives[1] - Marketing expenses surged by 49% YoY in the U.S. Consumer Services segment, reaching $813 million in Q4'24[14] - Card Member rewards, business development, and Card Member services expenses grew by 15% YoY, reaching $7,345 million in Q4'24[14] - Salaries and employee benefits and other operating expenses decreased by 1% YoY, totaling $4,172 million in Q4'24[14] - Total expenses increased by 11% YoY across all segments, reaching $13,131 million in Q4'24[14] - Marketing expenses surged by 49% YoY to $813 million in Q4'24, contributing to a total of $3,051 million for FY'24, up 18% from FY'23[16] - Total expenses for Q4'24 in Global Merchant and Network Services decreased by 6% YoY to $1,035 million, with FY'24 totaling $3,044 million, an 18% decrease from FY'23[20] Capital and Liquidity - Common Equity Tier 1 capital ratio remained strong at 10.5% in Q4'24, with total capital of $31.1 billion[4] - Return on average common equity improved to 36.1% in Q4'24, up from 33.0% in Q4'23, demonstrating strong profitability[2] - Return on Average Common Equity (ROCE) for Q4'24 was 36.1%, up from 33.0% in Q4'23[21] - Supplementary Leverage Ratio is calculated as Tier 1 capital divided by total leverage exposure, with a minimum requirement from Q4'24 onwards[15] - Interest expense for maintaining corporate liquidity pool and funding Card Member receivables is primarily represented[25] - Interest income from Other loans, interest-bearing deposits, and fixed income investment portfolios is primarily represented[25] Business Growth and Customer Acquisition - Cards-in-force grew to 146.5 million in Q4'24, a 4% increase year-over-year[6] - Proprietary new cards acquired in FY'24 totaled 13.0 million, compared to 12.2 million in FY'23[6] - Proprietary cards-in-force grew by 6% YoY to 46.3 million in Q4'24, with FY'24 total at 46.3 million, up 6% from FY'23[16] - Proprietary cards-in-force for Q4'24 increased by 4% YoY to 21.9 million, with FY'24 reaching 21.9 million, a 4% increase from FY'23[18] - Proprietary new cards acquired measure the effectiveness of the company's customer acquisition strategy[15] Segment Performance - International Card Services reported a 15% FX-adjusted growth in Q4'24[9] - Pretax income in the Commercial Services segment increased by 22% YoY, totaling $814 million in Q4'24[14] - Pretax income in the International Card Services segment declined by 76% YoY, amounting to $34 million in Q4'24[14] - Pretax segment income increased by 5% YoY to $1,545 million in Q4'24, with FY'24 total reaching $6,377 million, a 17% increase from FY'23[16] - Pretax segment income for Q4'24 in Global Merchant and Network Services grew by 4% YoY to $853 million, with FY'24 reaching $4,398 million, a 20% increase from FY'23[20] - Segment assets for Q4'24 in Global Merchant and Network Services decreased by 25% YoY to $17,712 million, with FY'24 reaching $17,712 million, a 25% decrease from FY'23[20] Network Volumes and Billed Business - Network volumes in Q4'24 reached $464 billion, a 7% year-over-year increase[6] - Billed business in Q4'24 was $408.4 billion, up 8% year-over-year[6] - Goods & Services spend accounted for 74% of Q4'24 billed business, growing 7% year-over-year[9] - Travel & Entertainment spend grew 10% year-over-year in Q4'24, accounting for 26% of billed business[9] - Billed business increased by 9% YoY to $174.0 billion in Q4'24, with FY'24 total reaching $654.8 billion, a 7% increase from FY'23[16] - Billed business increased by 4% YoY to $136.0 billion in Q4'24, with FY'24 total at $526.5 billion, up 2% from FY'23[17] - Billed business for Q4'24 grew by 11% YoY to $97.7 billion, with FY'24 reaching $366.9 billion, an 11% increase from FY'23[18] - Total network volumes for Q4'24 increased by 7% YoY to $464.0 billion, with FY'24 reaching $1,764.8 billion, a 5% increase from FY'23[20] Dividends and Shareholder Returns - Cash dividends declared per common share increased 17% YoY to $0.70 in Q4'24, reflecting strong cash generation[1] - Earnings allocated to participating share awards were $17M, $18M, $23M, $18M, and $14M in Q4'24, Q3'24, Q2'24, Q1'24, and Q4'23, respectively[15] - Dividends on preferred shares were $14M, $15M, $15M, $14M, and $15M in Q4'24, Q3'24, Q2'24, Q1'24, and Q4'23, respectively[15] Other Financial Metrics - Total assets increased 4% YoY to $271.461 billion in Q4'24, supported by growth in Card Member loans and cash equivalents[2] - Net interest yield on average Card Member loans including loans held for sale increased to 11.8% in Q4'24, up from 11.7% in Q4'23[10] - Net interest yield on average Card Member loans improved to 12.7% in Q4'24, with FY'24 average at 12.8%, up from 12.4% in FY'23[16] - Net interest yield on average Card Member loans including loans held for sale rose to 11.1% in Q4'24, up from 10.3% in Q4'23[17] - Card Member receivables decreased by 5% YoY to $24,945 million in Q4'24, with FY'24 total at $24,945 million, down 5% from FY'23[17] - Average fee per card in Q4'24 was $108, a 14% increase year-over-year[6] - Average fee per card is computed annually based on proprietary net card fees divided by average proprietary total cards-in-force[15] - Network volumes include billed business (Card Member spending) and processed volumes on cards issued under network partnerships[15] - Cards-in-force represent the number of issued and outstanding cards, excluding supplemental cards on consumer accounts[15]

Building wealth through dividend investing hinges on identifying companies that can sustain and grow their payouts over long periods. This strategy, known as dividend growth investing, offers investors a powerful combination of rising income streams and the potential for substantial capital appreciation over time. Companies capable of consistently raising dividends often exhibit robust free cash flow, healthy profit margins, and management teams committed to rewarding shareholders.Two critical metrics can h ...

Quarterly results from several of the major credit card companies will be a highlight of this week’s earnings lineup with a spotlight on American Express (AXP)  in particular.Hitting fresh 52-week highs of $319 a share on Tuesday, AXP has soared over +70% in the last year. This has impressively outperformed the broader indexes and many of its credit card peers including Capital One’s (COF)  +49% and Mastercard’s (MA)  +20%.That said, let’s see if the surge in American Express stock can continue as its Q4 ea ...

Core Viewpoint - The 2024 Q4 earnings season is underway, with Discover Financial Services (DFS) and American Express (AXP) among the notable companies reporting, both of which have significantly outperformed the S&P 500 over the past year [1][2][14]. Group 1: Discover Financial Services (DFS) - Analysts expect DFS to report an EPS of $3.15, reflecting a 14% increase over recent months and a substantial 100% year-over-year growth [5]. - The Zacks Consensus estimate for DFS's net interest income is $3.6 billion, which is a 3% increase from the previous year's $3.4 billion, with the company having a history of exceeding expectations in this area [6]. - DFS's current forward 12-month earnings multiple is 14.5X, indicating a 35% discount compared to the S&P 500, and the PEG ratio stands at 1.1X, suggesting a fair price for the anticipated growth [6][7]. Group 2: American Express (AXP) - AXP's EPS is projected at $3.03, which is a 3% increase over recent months and indicates a 15% year-over-year growth [8]. - The Zacks Consensus estimate for AXP's net interest income is $4.1 billion, representing a 15% increase from the previous year, with AXP also having a strong track record of positive surprises in this metric [10]. - AXP's Q3 sales reached $16.6 billion, marking the tenth consecutive period of record sales, with Q4 sales forecasted at $17.2 billion, reflecting an 8.8% year-over-year growth [11][12].