American Express Conference Call Highlights

American Express AXP reported its third quarter earnings on Thursday. Shares of the company are down one percent. Operational Highlights and Growth: • Our performance this quarter reflected higher spending by our Card Members. • Solid growth in loan balances, credit indicators at or near historical lows, disciplined control of operating expenses and a strong balance sheet. • Returned a substantial amount of capital to shareholders in the form of share repurchases over the past year. • Our earnings per share growth of 12% outpaced revenue growth. • Again reflecting the benefits of disciplined operating expense control and our share repurchase program. • We also made progress on several newer fronts this quarter, attracting additional patterns to our OptBlue program, acquiring new Card Members on our EveryDay product. • Participating in the upcoming Apple Pay mobile wallet launch. • Also during the quarter, SAP announced its proposed acquisition of Concur • Technologies, which as it closes, will produce a significant gain for us. • Stepping back a bit, on a year-to-date basis, we have been able to drive strong EPS growth within our 12% to 15% long-term target range, despite having adjusted revenue growth remain below our long-term targets at approximately 5%. • We are beginning to see some modest acceleration in our volumes, but revenue is not yet growing as fast. • Our challenge will be to continue to deliver in an environment that may be characterized by modest global economic growth and more intense competition. • FX-adjusted billed business growth increased slightly to 10% during the current quarter • Reported revenue was flat to last year, but was up 5% if you adjust for business travel and it rounds to 6% when you also adjust for FX. • Pre-tax income rose by 12% during the quarter, while net income was only up • 8%. • Helping our EPS is the fact that over the last four quarters we have repurchased $4 million of common shares. • This translated into a 3% decrease in average shares outstanding versus the prior year. • Billed business growth on a reported basis remained consistent at 9%. • In addition, the capabilities that we'll be integrating into Apple Pay are a foundation that can be used to fuel our growth in mobile payments more broadly in the longer term. • Finally, as you are aware, our trial with the DoJ concluded last week when both sides presented their closing arguments. • We are now waiting for the judge to issue his decision, which could take several months or longer to complete. International: • In the U.S., total billings growth improved by 80 basis points versus the prior quarter. • U.S. corporate and small business spending both accelerated and had double-digit growth rates during the quarter. • Outside the U.S., where volumes continue to grow at a faster pace than the total company, billed business growth increased to 11%. • We continued to see very strong volumes in China, and also saw improved growth in Australia and Korea. • Loan growth remained consistent with last quarter and was up 5% versus last year on a worldwide basis and 6% in the U.S. • Q3 adjusted revenue growth was 5%. • This quarter we were able to return 89% of the capital we generated to shareholders, while also maintaining our strong capital ratios. • Apple Pay: • We're participating in the wallet, because we want to be everywhere our customers are and millions of them are devoted Apple users. • Now, mobile wallet can have the potential to change consumer behavior for some years, but it's unlikely to be an overnight shift. • It will take time, even with Apple's innovative technology and customer base. • The pace of consumer and merchant adoption will depend on the benefits, protection and overall value proposition that participating issuers and networks can provide. • With Apple Pay, we are keeping our closed loop advantage intact and are retaining direct relationships with Card Members and merchants.