Market Overview

Earnings Preview for American Express

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On Friday, October 23, American Express (NYSE: AXP) will release its latest earnings report. Benzinga's outlook for American Express is included in the following report.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Wall Street expects EPS of $1.33 and sales around $8.66 billion. In the same quarter last year, American Express posted EPS of $2.08 on sales of $10.99 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

The analyst consensus estimate would represent a 36.06% decrease in the company's earnings. Revenue would have fallen 21.19% from the same quarter last year. In comparison to analyst estimates in the past, here is how the company's reported EPS stacks up:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019
EPS Estimate -0.11 1.43 2.01 2.03
EPS Actual 0.29 1.98 2.03 2.08
Revenue Estimate 8.15 B 10.65 B 11.36 B 10.95 B
Revenue Actual 7.67 B 10.31 B 11.37 B 10.99 B

Stock Performance

Shares of American Express were trading at $101.48 as of October 21. Over the last 52-week period, shares are down 13.95%. Given that these returns are generally negative, long-term shareholders are probably unhappy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. American Express is scheduled to hold the call at 08:30:00 ET and can be accessed here.

 

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Posted-In: Earnings