Economy|Coronavirus pandemic
American Express sees windfall from reinvigorated US consumers
American Express’s revenue jumped to $10.24bn from $7.68bn last year, the company reported on Friday.
American Express said demand for its fee-based Platinum Cards has gotten stronger, with the credit card giant registering 2.4 million new cards in the quarter ended June 30 [File: Mark Makela/Reuters]
23 Jul 2021
Spending at restaurants, shops and entertainment venues has come back in force as coronavirus vaccines become more common — and that spending fuelled a revenue surge at American Express during the second quarter.
Momentum picked up as the quarter progressed, the company said Friday, particularly spending from younger customers.
How safe are the Tokyo Olympics from COVID-19?
‘Just the beginning’: US imposes new sanctions on Cuba
US prosperity weakened by COVID-19, mass shootings, report finds
As Delta drives COVID surge, vaccines, strategies under scrutiny
“We saw card member spending accelerate from the prior quarter and exceed pre-pandemic levels in June, with the largest portion of this spending growth coming from Millennial, Gen Z, and small business customers,” Chairman and CEO Stephen Squeri said in a prepared statement.
Revenue, net of interest expense, jumped to $10.24bn from $7.68bn last year, stronger than the $9.47bn that Wall Street was looking for, according to a survey by Zacks Investment Research.
Shares of American Express Co climbed 3.4 percent at the opening bell.
Demand for fee-based Platinum Cards is getting stronger, Squeri said, and American Express registered 2.4 million new cards in the quarter.
The New York company earned $2.28bn, or $2.80 per share, for the three months ended June 30. A year earlier it earned $257m, or $0.29 per share. The current quarter included $866m in credit reserve releases.
This easily beat projections of $1.64 from industry analysts.
American Express’s consolidated provisions for credit losses resulted in a benefit of $606m for the current quarter. This was mostly because of the reserve releases and lower net write-offs. The year-ago period had a provision expense of $1.6bn, which was primarily due to significant credit reserve builds the company implemented as it contended with the repercussions of the pandemic.
American Express took a hit in the pandemic, with fewer Americans travelling, dining out or shopping. Spending on corporate and individual charge and credit cards dropped, and those who kept a revolving balance paid off their debts.
That spending freeze thawed as infections plunged during the vaccine roll-out.
Infections have begun to spike in some regions of the country where vaccination rates are low. COVID-19 cases nearly tripled in the United States over two weeks amid an onslaught of vaccine misinformation that is straining hospitals.
At this point, rising infections in some regions of the US do not appear to be of great concern with the rate of vaccination high and rising in parts of the country.
“We are increasingly optimistic that the momentum we’ve generated will continue given the strength we see in our core business, particularly in the US, even as the pace of the recovery remains uneven in different regions around the world,” Squeri said. “Based on current trends, we are confident in our ability to be within the high end of the range of EPS expectations we had for 2020 in 2022.”
Earlier this month American Express said that it was increasing the benefits — and the fee — on its flagship Platinum Card. The annual fee is going from $550 to $695.
India’s weight-loss guru Rujuta Diwekar on why grandma knows best
Diwekar, whose clients include top tycoons and Bollywood stars, dishes out advice that’s discordant yet appealing.
23 Jul 2021
US jobless claims unexpectedly rise to 419,000, most since March
Initial jobless claims in regular state programmes were up 51,000 from the prior week, the US Labor Department said.
22 Jul 2021
G20 likely to conclude talks without ambitious climate deal
Ministers were unable to agree on timetables needed to reach net-zero global emissions by 2050, according to officials.
22 Jul 2021
Coca-Cola sales surge as restaurants, venues reopen
Coca-Cola saw a 37% revenue spike in the quarter ended July 2, with shares fizzing 2.3% higher Wednesday on Wall Street.
21 Jul 2021
DiDi co-founder Liu told colleagues she plans to leave: Sources
Bitcoin sinks below $43,000 as Evergrande fears sweep markets
Canada elections: Kitchen table economics loom large
Greek wildfires devastated land. They also took away livelihoods
‘Hotel Rwanda’ hero sentenced to 25 years in prison
Canada votes: Polls open as Trudeau faces election battle
Infographic: All you need to know about the Canadian election
New Zealand grapples with Delta – and Tucker Carlson
Our Channels
Our Network
Follow Al Jazeera English:
© 2021 Al Jazeera Media Network