American Express Stock Trades Higher: Strong FY24 Outlook, Dividend Hike Drive Investor Action

American Express Co AXP fiscal fourth-quarter revenue 2023 (net of interest expense) grew 11% year-on-year to $15.8 billion, missing the consensus of $16.0 billion. 

EPS of $2.62 missed the consensus of $2.64. The stock is trading higher premarket.

Card Member spending or Billed Business grew 6% Y/Y to $379.8 million. 

U.S. Consumer Services revenue was $7.4 billion, up 13% Y/Y. Commercial Services revenue was $3.8 billion, up 7% Y/Y.

International Card Services revenue was $2.7 billion, up 12% Y/Y, and Global Merchant and Network Services revenue was $1.9 billion, up 10% Y/Y.

Total expenses increased by 4% Y/Y to $1.1 billion, primarily reflecting a reserve build associated with merchant exposure for Card Member purchases. 

Provision for credit losses stood at $1.44 billion, compared with $1.03 billion a year ago, reflecting higher net write-offs and net reserve build. 

Dividend: American Express plans to increase the regular quarterly dividend by 17%, from $0.60 to $0.70 per share, beginning with the first quarter 2024 dividend declaration.

Chair and CEO Stephen J. Squeri said, “We continued to drive strong customer engagement, and demand for our premium products remained robust. We added 12.2 million new proprietary cards in the year, bringing the total number of cards-in-force issued on our global network to over 140 million.”

FY24 Outlook: The company expects revenue growth of 9% – 11% or $65.96 billion – $67.17 billion (versus consensus of $66.28 billion) and EPS of $12.65 – $13.15 (versus consensus of $12.41) for the fiscal year.

The company will continue to run the business, focusing on revenue growth of 10% plus and mid-teens EPS growth.

Price Action: AXP shares are trading higher by 1.77% at $191.40 premarket on the last check Friday.

Photo via Wikimedia Commons