Welcome to the Reuters.com BETA. Read our Editor's note on how we're helping professionals make smart decisions.
Read more
Sign In
April 23, 20214:03 AM PDTLast Updated 4 months ago
AmEx credit spending slump eclipses profit beat, shares fall
ReutersNiket NishantSohini Podder

2 minute read
Credit cards of American Express are photographed in this illustration picture in this March 17, 2016, file photo. REUTERS/Kai Pfaffenbach/Illustration
Travel restrictions to slow business travel recovery - CFO
Cross-border travel to rebound only in 2022 - CEO
Releases $1.05 bln from credit reserves
April 23 (Reuters) - American Express Co (AXP.N) said on Friday travel and entertainment-related spending on its cards halved in the first quarter as customers stayed at home during the COVID-19 crisis, overshadowing its better-than-expected profit.
Cross-border restrictions and a resurgence of COVID-19 cases in several parts of the world have forced people and businesses to put travel on hold, hitting credit-card issuers.
Chief Financial Officer Jeffrey Campbell said in an interview with Reuters the continued travel restrictions would slow a rebound in business travel for large corporations.
"Our baseline assumption remains that by the fourth quarter of this year, global T&E (travel and entertainment) spending will be at around 70% of 2019 levels. But travel for large and global corporations is going to rebound slower," Campbell said.
Shares of AmEx fell over 2% in afternoon trading.
But Campbell struck a more optimistic tone on overall spending volumes, saying he expected recovery to pre-pandemic levels either later this year or in 2022.
The credit card issuer is already seeing signs of a pick-up in domestic travel thanks to pent-up demand and vaccine rollouts, Chief Executive Officer Stephen Squeri told analysts on a call.
Cross-border travel, however, will bounce back only in the second half of 2022, he said.
The New York-based company's first-quarter revenue fell 12% to about $9 billion, also hit by lower loan volumes.
But AmEx's net income surged six-fold to $2.2 billion as it freed up more than $1 billion of funds it had set aside to cover credit losses from the pandemic.
Excluding that benefit, earnings were $1.74 per share, higher than a Refinitiv IBES estimate of $1.61 per, driven by a rebound in non-travel spending.
Reporting by Sohini Podder in Bengaluru; Editing by Aditya Soni
Our Standards: The Thomson Reuters Trust Principles.
More from Reuters
Play video on original page

Read Next
Apple says chip shortage reaches iPhone, growth forecast slows
5:21 PM PDT
Microsoft sees steady cloud growth after record quarterly profit
5:04 PM PDT
Google parent Alphabet reaches record quarterly revenue, profit in ad boom
4:44 PM PDT
Visa gets vaccine boost as domestic spending back near pre-COVID levels
4:22 PM PDT

Sign up for our newsletter
Subscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox.
Business · 5:21 PM PDT
Apple says chip shortage reaches iPhone, growth forecast slows
Apple Inc (AAPL.O) said on Tuesday that a global chip shortage that has bit into its ability to sell Macs and iPads will start to affect iPhone production and forecasted slowing revenue growth, sending its shares lower.
Google parent Alphabet reaches record quarterly revenue, profit in ad boom
4:44 PM PDT
Microsoft sees steady cloud growth after record quarterly profit
5:04 PM PDT
Starbucks forecasts steamy sales despite pressure in China
4:06 PM PDT
Oreo maker sweetens sales outlook as emerging markets bounce back
3:34 PM PDT
About Reuters
About Reuters
Reuters News Agency
Brand Attribution Guidelines
Reuters Leadership
Reuters Fact Check
Reuters Diversity Report
Stay Informed
Download the App
Information you can trust
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Follow Us
Thomson Reuters Products
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Refinitiv Products
Information, analytics and exclusive news on financial markets - delivered in an intuitive desktop and mobile interface.
Refinitiv Data Platform
Access to real-time, reference, and non-real time data in the cloud to power your enterprise.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
Advertise With Us
Advertising Guidelines
Terms of Use
Site Feedback

All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2021 Reuters. All rights reserved