American Express is scheduled to report fourth-quarter earnings after the market close Thursday.
Here’s what Wall Street expects:
- Earnings: $1.80 cents per share, forecast by Refinitiv
- Revenue: $10.56 billion, forecast by Refinitiv
The financial services firm notched record revenue in the third quarter of 2018, boosted by higher spending from consumers and small businesses, the company said. Analysts will be watching to see if American Express kept up its revenue growth and factors in more for 2019.
“They’ve been putting up pretty nice results so the question is: What’s the level of acceleration, and can that pace continue?” said Bill Carcache, senior analyst at Nomura Securities.
Shares of the credit card issuer are down roughly 1.5 percent year over year, and were slightly higher ahead of its quarterly report on Thursday.
Nomura and other firms are watching something known as “provision” losses, the expenses for uncollected customer loans and loan payments. Those costs have been dropping in recent quarters, Carache said. Wall Street is also eyeing U.S. consumer spending, which tends to track closely with the performance of credit card companies.
“A macro theme for American Express is the health of the consumer, and we’ve seen pretty good U.S. consumer credit,” Jefferies Managing Director John Hecht told CNBC. “That should portend decent borrowing.”
Citigroup, J. P. Morgan and Bank of America all said in their own quarterly reports this week that they expect consumer credit quality this year to be similar to 2018, Sandler O’Neill & Partners managing director Christopher Donat said. J. P. Morgan CEO Jamie Dimon said on a call with analysts that “consumers are in good shape, they’re spending money.”
But spending has been weak for higher-end retailers like Tiffany’s, which could be a signal that high-net-worth American Express customers are also scaling back. The company could mention geopolitical concerns and European economic performance on its call with analysts following the results.
Oppenheimer senior analyst Dominick Gabriele said it’s possible billing and revenue growth took a hit after U.S. stocks posted their worst December since the Great Depression. Gabriele said Amex customers watching their retirement plans suffer may have reined in spending as a result.
Last quarter, American Express announced an agreement with mobile payments app firms PayPal and Venmo to enable cardholders to send payments and pay their Amex bills.
— This is breaking news. Please check back for updates.
