The issuer of American Express plastic cards rose in price after the report
The issuer of plastic cards and the provider of non-cash payments American Express Co. (AXP), rose by almost 9% at auction on January 25 after the publication of positive results of the fourth quarter and the whole of 2021.
The positive news for American Express was the high consumer spending in the United States in the past months. Thanks to this, the company’s revenue in the fourth quarter exceeded $ 12 billion. As a result, earnings per share (diluted) were $2.18. In addition, American Express reported earnings per share of $10.02 on total revenue of $42.4 billion for the whole year, exceeding Wall Street analysts’ estimates.
In the quarter, the company showed good growth in loan balances; balances at the end of the period increased by more than 15%. In addition, Americans’ spending on travel and entertainment continued to recover, reaching 82% in the fourth quarter of 2021, the level observed before the pandemic in the fourth quarter of 2019.
American Express issued a reserve capital of $168 million in the past quarter to cover loan losses, which helped slightly increase profits. According to the company’s management, the investment strategy has allowed cardholders to reach a record level of spending, maintain customer retention and satisfaction at a level above the pre-pandemic, increase the number of new card purchases, increase loan balances, and strengthen the number of new card purchases digital interaction with customers.
According to forecasts, in 2022, revenue will grow by 18-20%, and profit will range from $9.25 to $9.65 per share. The gradual economic recovery has become a positive trend. American consumers have returned to travel, attend parties again, buy gifts, spend money on home improvement, purchase goods and services. The spread of the omicron strain still puts pressure on the economy, but vaccination removes some restrictions.
