01—Abstract
Summary
Summary of the 10-Q filed April 23, 2019. Cited figures are marked; the original filing is the authoritative source.
American Express Company (AXP) reported its first quarter 2019 financial results, showing a 7% increase in total revenues net of interest expense to $10.4 billiona.
This growth was driven by a 4% rise in U.S. billed business and a 7% increase in proprietary billed business globally, with a notable 9% increase when adjusted for foreign currency fluctuations. Net income for the quarter was $1.55 billionb, a 5% decrease from the prior year, impacted by an $0.21 per share litigation-related charge. The company continued to invest in customer engagement, with expenses rising 11%, including increased spending on marketing, rewards, and Card Member services.
The company's balance sheet remained robust, with total assets growing to $197.2 billionc. Customer deposits increased to $72.9 billion, reflecting a diversified funding strategy.
Provisions for losses saw a modest increase of 4%, with the company noting increased stability in its lending portfolio compared to the prior year. American Express also actively returned capital to shareholders, repurchasing $1.3 billiond in common stock and paying $0.3 billion in dividends during the quarter.
02—Key points
Key Highlights
- Total revenues net of interest expense increased by 7% to $10.4 billion, driven by a 4% increase in total billed business (7% on an FX-adjusted basis).
- Net income decreased by 5% to $1.55 billion ($1.80 diluted EPS), impacted by a litigation-related charge of $0.21 per share.
- Investments in customer engagement, including marketing, rewards, and Card Member services, increased by 12% year-over-year.
- Card Member loans grew by 11% to $81.0 billion, with provisions for losses increasing by 4%.
- Customer deposits increased by 4% to $72.9 billion, supporting the company's diversified funding strategy.
- The company returned $1.6 billion in capital to shareholders through dividends ($0.3 billion) and share repurchases ($1.3 billion) in the quarter.
- Regulatory capital ratios remained strong, well above minimum requirements.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2019filed April 23, 2019Financial Statements
Q1 FY2019 against Q1 FY2018
| Line item | Q1 FY2019Q1 FY2018 | Change |
|---|---|---|
| Revenue | $6.70B$6.39B | +4.9% |
| Interest Expense | $895.00M$621.00M | +44.1% |
| Net Income | $1.55B$1.63B | −5.1% |
| EPS (Basic) | $1.81$1.86 | −2.7% |
| EPS (Diluted) | $1.80$1.86 | −3.2% |
| Shares Outstanding (Basic) | 841.00M859 | +97904440.2% |
| Shares Outstanding (Diluted) | 843.00M861 | +97909307.7% |
05—Questions
Frequently Asked Questions
How did American Express's revenue perform in the first quarter of 2019?
American Express reported a 7% increase in total revenues net of interest expense, reaching $10.4 billion for the first quarter of 2019. This growth was primarily fueled by a 4% increase in total billed business and a 7% rise in proprietary billed business globally, with a notable 9% increase when adjusted for foreign currency fluctuations.
What was the impact of the litigation-related charge on net income?
Net income for the first quarter of 2019 was $1.55 billion, a 5% decrease compared to the same period last year. This decrease was partly due to a significant litigation-related charge which had an impact of $0.21 per diluted share.
How is American Express managing its loan portfolio and credit risk?
Card Member loans grew by 11% to $81.0 billion. Provisions for losses increased by 4% year-over-year, but the company noted increased stability in its lending portfolio, leading to a smaller reserve build compared to the prior year. The net write-off rate for principal only on Card Member loans was 2.3%.
What is American Express's capital return strategy?
During the first quarter of 2019, American Express demonstrated a strong commitment to returning capital to shareholders. The company repurchased approximately $1.3 billion of its common stock and paid $0.3 billion in dividends, totaling $1.6 billion returned to shareholders.
06—Continue