Summary
In 2007, American Express Company (AXP) demonstrated strong revenue and income growth, with revenues reaching $27.7 billion and income from continuing operations at $4.0 billion. Diluted EPS also saw a significant increase. The company's "spend-centric" business model, focusing on driving spending on its cards, continued to be a key competitive advantage, supported by its strong brand reputation and a growing network of merchants and cardholders. However, the end of 2007 saw the emerging impact of a weakening U.S. economy, leading to slower cardmember spending and an increase in past-due and write-off rates in the U.S. Card Services segment. This prompted American Express to increase its credit-related reserves and adopt a more cautious outlook for 2008. The company also made strategic divestitures, including the agreement to sell its international banking subsidiary, AEBL, to Standard Chartered PLC for approximately $1.1 billion.
Financial Highlights
27 data points| Operating Income | $5.69B |
| Interest Expense | $3.98B |
| Net Income | $4.01B |
| EPS (Basic) | $3.40 |
| EPS (Diluted) | $3.34 |
| Shares Outstanding (Basic) | 1.17B |
| Shares Outstanding (Diluted) | 1.19B |
Key Highlights
- 1Revenue increased by 10% to $27.7 billion in 2007, with income from continuing operations up 12% to $4.0 billion.
- 2Diluted EPS for continuing operations rose by 16% to $3.39.
- 3The company's "spend-centric" model remains a core competitive advantage, with total worldwide billed business reaching $647.3 billion.
- 4Global Network Services (GNS) continues to expand, with 20 million Cards-in-force issued by GNS partners by year-end 2007, representing a significant portion of new card issuances outside the U.S.
- 5The company is experiencing increased credit-related reserves and rising past-due and write-off rates in its U.S. Card Services segment due to a weakening U.S. economy.
- 6American Express entered into an agreement to sell its international banking subsidiary, AEBL, for approximately $1.1 billion.
- 7The company is actively involved in significant legal proceedings, including a major lawsuit against Visa and MasterCard regarding alleged anti-competitive practices.