- AXP stock slips 5% on topline weakness in third quarter.
- Full-year revenue guidance guided down to low end of prior range.
- American Express bested consensus on earnings by $0.20.
- Credit provisions, write-offs rise moderately in Q3.
American Express (AXP) stock swooned over 5% on Friday after it reported third-quarter results. The company reduced its outlook for full-year revenue guidance from between 9% and 11% to the lower end of that range, which perturbed market sentiment.
Despite reporting Q3 consensus revenue at consensus on Friday and raising full-year earnings guidance, AXP shares immediately sold off.
The Dow Jones Industrial Average (DJIA), of which American Express is a constituent, has advanced slightly at the time of writing, while the NASDAQ gains 0.76%.
American Express earnings news
Revenue for the credit card issuer rose some 8% YoY in the third quarter as billed business reached $387.3 billion.
“Based on our performance to date and the strong earnings our core business is generating, we are raising our full-year EPS guidance to $13.75 - $14.05 vs $13.28 consensus, up from $13.30 - $13.80 previously,” the New York City based company said.
The higher revenue seen on an annual basis was attributed to growth in loan volumes, higher net interest income, stable customer spending, and accelerated fee growth.
American Express acquired 3.3 million new card users in the quarter and said it saw a major increase in premium credit card customers. Card member loans rose from $118 billion one year ago to $134.5 billion in the recent quarter.
Provision for credit losses increased from $1.23 billion in the year ago quarter to $1.36 billion in Q3. Write-offs rose to 2.2% from 2% one year ago. It was 2.4%, however, in Q2.
American Express stock forecast
AXP stock hit an all-time high just on Thursday. But that was all over Friday when shares dropped starkly at the open. Share initially fell through the topline of a price channel that began back in April. American Express stock originally broke out of that channel in mid-September.
Yet the price action has largely recovered above the trendline, so it make just act as support. In reality, the Q3 results weren't poor at all, so AXP may consolidate here before finding new buyers.
AXP daily stock chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to recovery gains near 1.0850 ahead of Fedspeak
EUR/USD trades in positive territory near 1.0850 on Friday following a four-day slide. China's stimulus optimism and a broad US Dollar correction help the pair retrace the dovish ECB decision-induced decline. All eyes remain on the Fedspeak.
GBP/USD pares UK data-led gains at around 1.3050
GBP/USD is trading at around 1.3050 in the second half of the day on Friday, supported by upbeat UK Retail Sales data and a pullback seen in the US Dollar. Later in the day, comments from Federal Reserve officials will be scrutinized by market participants.
Gold at new record peaks above $2,700 on increased prospects of global easing
Gold (XAU/USD) establishes a foothold above the $2,700 psychological level on Friday after piercing through above this level on the previous day, setting yet another fresh all-time high. Growing prospects of a globally low interest rate environment boost the yellow metal.
Crypto ETF adoption should pick up pace despite slow start, analysts say
Big institutional investors are still wary of allocating funds in Bitcoin spot ETFs, delaying adoption by traditional investors. Demand is expected to increase in the mid-term once institutions open the gates to the crypto asset class.
Canada debates whether to supersize rate cuts
A fourth consecutive Bank of Canada rate cut is expected, but the market senses it will accelerate the move towards neutral policy rates with a 50bp step change. Inflation is finally below target and unemployment is trending higher, but the economy is still growing.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.